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Dismissing an employee? Don't be harsh, unreasonable or unjust

Effectively managing an employee’s workplace performance and conduct will reduce the risk of a successful and potentially costly unfair dismissal claim.

Two key pieces of relevant legal instruments are the Local Government Employees (State) Award 2020 (the Award) and section 84 of the Industrial Relations Act 1996 (NSW) (the Act).

The first includes guidelines (Clause 37) for conducting investigations. The Award also states that failure to comply with the guidelines may be used as evidence of failure to properly conduct or speedily conclude an investigation, so they should be better treated as instructions.

The Act includes permissible grounds for ruling a termination harsh, unreasonable or unjust.

Should a finding be made against the employer, the Industrial Relations Commission of NSW can grant an order to reinstate, re-employ, or award compensation of up to six months’ pay. Other orders include remuneration from the time of termination to the time an order is made by the Commission and the dismissal of an application.

This is another way of saying that mishandling an employee investigation or termination may be expensive indeed.

The Award provisions dealing with disciplinary action

Among other things, Clause 37 of the Award states that employees:

  • are to have access to their personal file and may take notes and/or obtain copies of them

  • are entitled to sight, note and/or respond to any adverse information on their personal file

  • are entitled to request the deletion or amendment of any disciplinary or other record on their personal file

  • are entitled to request the presence or involvement of a union representative at any stage

  • are entitled to apply for accrued leave for whole or part of any period in which they have been suspended.

The investigation process under the Award

These provisions recently received consideration by the Commission in Bowen v City of Ryde Council (No 2) [2020] NSWIRComm 1076 where Commissioner Sloan commented regarding the Award’s predecessor:

“The Award anticipates a threestage process. There is nothing to suggest that the Council turned its mind at all to section 36 [now section 37]. The repeated use of the word “shall” in clause 36(D) makes it clear that the disciplinary process it sets out is mandatory. Further the employer may only proceed to dismissal after complying with clause 36(D) and clause 36(E (i). An argument may arise as to whether in the absence of full compliance with clause 36(D), an employer is precluded by the Award from proceeding to termination.”

A fair process is essential

Regardless of the reason for considering termination, the employer must follow a procedurally fair process. Generally, this includes allowing the employee an opportunity to provide an explanation (whether the circumstances involve poor performance or misconduct).

Cases dealing with the concept of "harsh, unreasonable or unjust"

What constitutes “harsh, unreasonable or unjust” in employment cases? These terms have received wide judicial consideration in New South Wales.

In Antonakopoulos v State Bank of NSW (1999) 91 IR 385 the Commission found that failure to operate in a procedurally fair way may constitute the basis for determining whether a dismissal is harsh, unreasonable or unjust. However, such a finding is not inevitable in all such cases.

In Burge v NSW BHP Steel [2001] NSWIRComm 117 the Commission found that determining whether a remedy should be granted involved the question of whether the dismissal was harsh, unreasonable or unjust. In Hollingsworth v Cmr of Police (No 2) (1999) 47 NSWLR 151 at 181-2, the Commissioner also found that whether a dismissal was harsh, unreasonable or unjust involved matters of both fact and law.

Byrne v Australian Airlines Ltd (1995) 185 CLR 410 and Bankstown City Council v Paris (1999) 93 IR 209, made it clear that while the terms are distinct from one another, they also overlap to some degree. In each case, the Commission stated that dismissal of an employee may be capable of being unreasonable but not harsh, or harsh but not unjust, and other permutations may also apply.

In Department of Health v Perihan Kaplan [2010] NSWIRComm 65, the Commission rejected the argument that terminating employment following breach of a fundamental term of the employment contract “would necessarily not be harsh.”

Finally, in William James Sandilands v Industrial Relations Secretary on behalf of Legal Aid NSW [2018] NSWIRComm 1051 concerned domestic violence by a solicitor with Legal Aid. The case examined whether there was sufficient connection between the misconduct and the solicitor’s employment. The commission held there was, as the employer had a right to protect its reputation. The dismissal was found to be not harsh.

While these cases are useful, they also illustrate that what constitutes a harsh, unreasonable or unjust dismissal remains, to a meaningful extent, a case-by-case matter.

Key lessons

The key takeaway for employers is to follow a well-documented disciplinary process that adheres to the guidelines in Clause 37 of the Award and is procedurally fair. Doing so will minimise the prospect of having a termination ruled harsh, unreasonable or unjust.

Author: Shawn Skyring

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