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International calls: +61 3 9653 9123

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Summary dismissal for allegations of serious misconduct

Be sure to obtain urgent legal advice if you are facing summary dismissal for allegations of serious misconduct

For virtually every executive, the prospect of having one’s employment terminated on grounds of summary dismissal would cause understandable alarm. Where summary dismissal occurs, the right to receive notice of termination or pay in lieu of notice is forfeited.

There is simply no getting around it, to have one’s employment terminated in these circumstances has the potential to cause real financial loss and reputational damage. Depending on what is alleged to have occurred, there is also the exposure to a legal claim by the employer for loss and damage arising out of the wrongdoing.

Misconduct is the usual ground for such an outcome as it usually involves a positive and intentional wrongdoing. However, it may also include incompetence/neglect which does not involve intentionality.

Remain vigilant and mindful of how your conduct is likely to be viewed by your employer

Irrespective of what is alleged to have occurred, it is essential that you remain vigilant and mindful of how your behaviour is likely to be viewed by your employer. That is especially true when it comes to attending work-related functions and dealing with staff members. The higher you rise in the hierarchy, the more will be expected of you. If your employer is looking for a reason not to award you a bonus or make a severance payment, then an allegation of misconduct can be the perfect excuse not to make any payout at all.

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What are your response options to allegations of misconduct?

If allegations of this nature are made, then what are your response options? They are limited and come down to either commencing an unfair dismissal application in the Fair Work Commission or – if you are excluded from that jurisdiction – negotiating the removal of the allegations or, failing that, the imposition of a penalty that falls short of termination – and if that’s not possible – resignation on agreed terms.

Access to Fair Work Commission restricted

It is possible for a lower to middle level executive to have access to the unfair dismissal provisions of the Fair Work Act 2009. It depends on whether the base salary falls below the “high income threshold”. That is adjusted on 1 July of each year and is currently $167,500 per annum. In determining whether you are above or below that figure, you exclude bonus, commission and superannuation.

If you are above that “magic number”, then you are usually locked out from accessing those provisions. However, there are some employees whose terms and conditions of employment are regulated by award conditions or other industrial instruments.

In that event, even though the base salary is above the cut-off point, there may still be access to the remedy. Those in the tertiary education sector usually fall into that category since they may well be covered by an Academic Staff Award. That needs to be determined on a case-by-case basis.

If you fall within the unfair dismissal jurisdiction, then the central question becomes whether the employer has a valid reason for your termination and have a gone about the termination process in a procedurally fair way. These are questions that also need to be assessed on a case-by-case basis.

However, for those executives above the cut-off point, whether the summary dismissal is valid has to be assessed in accordance with common-law principles.

Summary dismissal at common law

This is a large subject but, in essence, the (lawful) right to summarily dismiss depends on determining whether your conduct is incompatible with the fulfilment of your obligations under the contract of employment. Alternatively, does it involve a conflict between your interests and your duty to your employer or impede the faithful performance of your obligations (Blyth v Chemicals v Bushnell (1933) 49 CLR)?

The question, therefore, is whether you are in breach of the terms of the contract of employment (express or implied) and whether the breach is sufficiently serious to allow summary dismissal.

Unless there is an obligation imposed by the contract of employment or contained in some code or policy document incorporated into the contract, you don’t have a right to a warning or to a hearing prior to dismissal.

However, what often happens is that your employer will appoint an independent investigator to assess the evidence and draw up a list of allegations and submit those to you. You will usually have only a short period to respond. It is important that, if those opportunities are afforded to you, every effort is made to provide a comprehensive defence.

It is also important that the personnel file contains (consistent with the facts) a robust defence to any allegations that are made against you.

Usually, as part of that process, it will become apparent whether the allegations are of any substance and whether there is more than one witness to the alleged misconduct. Clearly, the more staff members who are prepared to give evidence against you, the more difficult your position is.

Where withdrawal of the allegations appears remote, negotiating resignation may be advisable

In circumstances where the prospects of withdrawal of the allegations seem remote, you may be better off negotiating a resignation rather than allowing the matter to proceed to a termination. Clearly, a termination for misconduct is a damaging outcome and very unhelpful for your résumé.

Nevertheless, even in circumstances where the evidence appears damning, there can be opportunities for an early end to the process so as to minimise the financial and reputational damage. That is particularly the case where you have otherwise had a productive and fruitful relationship with your reporting manager and have made a meaningful contribution to the company’s bottom line.

Obtaining early legal advice is essential if you are facing summary dismissal for allegations of serious misconduct

Because the consequences of summary dismissal are usually so dire, it is essential to get early legal advice so as to know how to respond. You do not wish to go out of the frying pan into the fire. You should not lose whatever opportunity you might have had to either negotiate for the withdrawal of the allegations or an amicable departure from the company.

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Call 1300 789 302 to speak to an employment lawyer. International calls +61 3 9653 9123

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.