INSIGHT

Summary dismissal for theft found to be unfair

By Simon Dewberry
Employment & Safety Franchising Industrials Litigation

In brief

A recent decision of the Fair Work Commission has highlighted the importance of ensuring that the decision to summarily terminate an employee's employment is proportionate to their misconduct. Senior Associate Tarsha Gavin reports.

How does it affect you?

  • In determining whether to summarily dismiss an employee, employers should consider whether this outcome is proportionate to the employee's misconduct.
  • This includes considering any mitigating and aggravating circumstances or factors related to the employee's conduct.

Background

Mr Johnson was an employee of the Castlemaine IGA supermarket and was summarily dismissed for stealing three items of produce from the store. Mr Johnson contended that his supervisor allowed him to take the items as they were samples, and that there was a practice in the workplace of other employees also being authorised to take samples and excess items home.

Mr Johnson brought an unfair dismissal claim. This claim was initially rejected by the Fair Work Commission (FWC) on the basis that Mr Johnson had breached his employer's policy that expressly prohibited employees from removing sample items for the store. The FWC concluded that this constituted a valid reason for dismissal. Mr Johnson appealed the decision.

Decision

A full bench of the FWC ruled that this decision was in error. It decided that the Commissioner failed to consider the proportionality of the summary dismissal outcome to Mr Johnson's misconduct. This failure was considered by the full bench to be inconsistent with recent authorities that have emphasised the importance of considering proportionality. 

The full bench went on to reconsider Mr Johnson's dismissal. It decided that although there was a valid reason for the termination, there were a number of mitigating factors which meant that summary dismissal was not proportionate to his conduct. These factors included:

  • Mr Johnson's conduct had been authorised by his supervisor;
  • other employees engaged in the same practice;
  • Mr Johnson had a long history of service with the company; and
  • he was 63 years old and would be likely to have difficulties gaining new employment.

Accordingly, the full bench held Mr Johnson's dismissal to be harsh and ordered compensation, with the quantum of compensation still to be determined.