The ‘big four’ banks have been in the media a lot recently for all the wrong reasons. Did you hear about the recent case where ANZ was ordered to pay a former employee more than $110,000.00?

A former banker was dismissed for serious misconduct after allegations arose that he had fraudulently doctored a confidential email and leaked this to the media. The issue? The NSW Court of Appeal (NSWCA) found that this decision was based on a flawed investigation process. And the worrying thing is that you could easily find yourself in a similar situation.

What is serious misconduct?

There’s no doubt that misconduct in the workplace is a serious matter. While disciplinary action can and should be taken, the Fair Work Act 2009 prescribes a narrow definition for the type of misconduct that will give you the right to terminate the employment relationship without notice.

Under the Act, serious misconduct includes both ‘willful or deliberate behavior by an employee that is inconsistent with the continuation of the contract of employment’, as well as ‘conduct that causes a serious and imminent risk to the health or safety or a person or the reputation, viability or profitability of your business’. The regulations expressly state that serious misconduct includes:

  • theft
  • fraud
  • assault
  • intoxication at work
  • the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

If you are considering firing an employee for serious misconduct, you must always ensure that the misconduct falls within the definition prescribed by the Fair Work Act 2009.

How can you minimise the risk?

In the case concerning the ANZ Bank, it was their investigation process that ultimately resulted in them being ordered to pay hundreds of thousands of dollars in damages and legal fees.

This pitfall is certainly one to be weary of. Indeed, let ANZ’s misfortune serve as a timely warning for anyone who is considering firing an employee for serious misconduct.

In conducting its investigation process, the court found that ANZ had relied heavily on circumstantial evidence, including a report by a handwriting expert who concluded that although it was ‘highly probable’ that the individual was responsible for leaking the email, the possibility of it being another person could not be eliminated entirely.

Considering all the circumstances of the dismissal, the court found that it was unreasonable for ANZ to have relied to such an extent on this circumstantial evidence in forming their conclusion.

What does this mean for you?

In considering any decision to fire an employee for serious misconduct, you must feel confident that, if challenged, you can prove that the individual actually engaged in the alleged misconduct. The strength of the evidence that is required will depend on the facts of each investigation.

The key lesson to be learnt is that you may be required to have a closer look at any circumstantial or unsubstantiated evidence before relying on such evidence to terminate the employment relationship.

For more information on the recommendations and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.