Employment terminations: Employee dishonesty is in the hot seat

In a recent case in the NSW Industrial Relations Commission (Commission), an employee found to have been dishonest to their employer has had their employment reinstated after the Commission determined that they had been unfairly dismissed.

Facts

Rocco Romeo had been employed by the Griffith City Council (employer) in the position of Team Leader – Traffic Facilities since 1998.

It was a condition of Mr Romeo’s employment that he hold a valid Australian driver’s license. However, in May 2022, Mr Romeo’s license was suspended for six months. He did not inform his employer that this had occurred.

Employee admits to dishonesty

In September 2022, after being made aware of Mr Romeo’s license suspension by another employee, Mr Romeo was asked to attend a meeting with his Employer.

During the meeting, Mr Romeo said that:

• his license was suspended for a period of only 4 months;
• he had driven a council vehicle around the depot whilst his license was suspended; and
• he did not tell his employer about the suspension due to health issues that he was experiencing which clouded his judgment.

What was the termination process like?

After being made aware that Mr Romeo had been dishonest during the meeting, the employer issued him with a show cause letter, giving him an opportunity to demonstrate why his employment should not be terminated.

Mr Romeo responded to the show cause letter with remorse and provided testimonies from his treating physicians outlining how his health issues had affected his judgment.

The employer considered Mr Romeo’s response, but decided to terminate his employment for serious misconduct, due to him:

• failing to report the suspension of his license;
• providing misleading information regarding the duration of the suspension; and
• driving a council vehicle on council property whilst his license was suspended.

The employer also took into consideration two prior warnings that Mr Romeo had been issued during his employment for unrelated conduct.

Mr Romeo subsequently lodged an unfair dismissal claim against the employer.

Was the dismissal harsh, unjust or unreasonable?

The Commissioner held that it was “beyond doubt” that Mr Romeo was guilty of misconduct by being dishonest and accepted that this can justify a summary dismissal.

However, it was held that the employer did not meet the onus of demonstrating that Mr Romeo’s conduct warranted termination, especially on a summary basis, and he succeeded in having his employment reinstated.

Key considerations in the Commissioner’s determination were that:

• The termination was harsh due to Mr Romeo’s length of service, age, location in a regional community and medical condition.
• No weight was given to Mr Romeo being required to hold a valid driver’s license, and driving unlicensed around the depot, because these were not specified as reasons for the termination in Mr Romeo’s termination letter.
• The medical information provided by Mr Romeo had been given little consideration by the employer, which should have made further enquiries.

Termination take aways for employers

This case highlights that a ‘valid reason’ to terminate alone is not enough to successfully defend an unfair dismissal claim. It is important that employers carefully consider all of the surrounding circumstances, including any impacts of a relevant medical condition, when engaging in a show cause process and making any decision to proceed with a termination of employment.

Care should also be taken when drafting termination letters to ensure that all valid reasons for a termination are referenced and can be relied upon in defending a claim.

Our Employment, Safety and Migration team at Macpherson Kelley are experienced in assisting employers consider and carry out termination processes, and in responding to post-termination claims. Please contact any of our team for assistance.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.