A recent decision of Fair Work Australia (“FWA”), has stressed the importance of treating all employees uniformly when conducting workplace misconduct investigations.

On 25 August 2009, Mr Bermingham, an employee of Kings Transport and Logistics (Aust) Pty Ltd (“Kings”) applied to FWA for relief with respect to the termination of his employment. Bermingham argued his dismissal was unfair, due to not being afforded the right to a witness in the termination meeting also on the basis of the incorrect description of the fraudulent activity in the termination advice.

Events leading up to the termination

Kings were informed by one of its employees that Bermingham had been stealing the company’s money to pay for staff social events. On the basis of the allegations, Kings proceeded to conduct what the FWA described as “cursory interviews with a number of staff, including employees said to be involved in the fraudulent activity”.

Following the investigations Bermingham was told to attend a meeting on 12 August 2009, however was not advised that he could bring a support person or witness.

During the course of the meeting, Bermingham stated he knew of the fraudulent activities and then proceeded to hand over an envelope containing $100.00 which he admitted had been wrongly taken from Kings. Kings proceeded to terminate his employment.

A couple days after effecting Bermingham’s termination, Kings conducted further interviews with other staff who were involved in the fraudulent behaviour, at least one of whom was later issued with a warning. (Interestingly, one of the cautioned employees was later promoted to the position formerly held by Bermingham).

The evidence

Bermingham claimed that he along with two others, Messrs Sheriff and Reid, agreed $100.00 in cash would be put aside from moneys that were payable to Kings. Bermingham further claimed that he only authorised the collection of $100.00 and conceded that his actions were not appropriate, however said that at the material time he had been suffering from work related stress, which King’s were aware of yet failed to appropriate manage. 

Bermingham’s direct manager, Mr C Smith spoke to at least three Kings employees who acknowledged that moneys taken from the company had been used to subsidise a social event at a local hotel. Smith formed the view that Bermingham, Sheriff and Reid were involved in the fraudulent activity, however were acting under orders from Bermingham.

FWA’s findings

Senior Deputy President O’Callaghan stated:-

• he was satisfied that Bermingham, Sheriff and Reid were all involved in the planning and misappropriation of Kings money.
• the investigation conducted by Kings “was seriously deficient in that it did not properly assess the conduct of other Kings employees and ultimate resulted in disparate and poorly informed actions being taken with respect to the employees involved in the misappropriations”.
• the advice and involvement of Kings’ human resources department was “remote and lacked in professionalism”.
• the poorly worded termination letter was not fundamental to the matter and was merely further evidence of King’s human resources poor handling .
• the interview was flawed due to Kings failing to give Bermingham the opportunity to respond as Bermingham’s response may have brought to light the full extent of Sherriff and Reid’s actions.
• Bermingham’s dismissal was warranted; however Kings did not treat all involved in a consistent manner.
• although the dismissal was not harsh or unjust it was unreasonable due to the reliance on information from other employees involved in the fraud; the lack of a “comprehensive and equitable investigation of what actually occurred” and Bermingham’s admission that he had taken the $100.00 and the fact that the $100.00 had been given to him by Sheriff even though he too had been implicated and may have been aware that Bermingham might be terminated.

SDP O’Callaghan then went on to consider whether it was appropriate to reinstate Bermingham or award him damages in lieu of reinstatement. SDP O’Callaghan decided reinstatement was not appropriate due to the loss of trust and also declined to award any damages due to the maximum payable for summary dismissal being one weeks’ salary and the Fair Work Act requiring the FWA to reduce the amount it would otherwise have awarded if the dismissal relates to misconduct.

Final words

This FWA decision emphasises the importance of procedural fairness; receiving adequate employment law advice and of being consistent when dealing with analogous circumstances whenever counselling, disciplining or terminating employees.