FWC extends ‘shelf-life’ of employee mis

FWC extends 'shelf-life' of employee misconduct

By Daniel MacMahon

How long can an employer rely on employee misconduct as a ‘valid reason’ for dismissal? What is the ‘shelf-life’ of a written warning? These are commonly asked questions by employers when looking to end an employment relationship. Whilst there are no prescriptive or ‘hard and fast rules’, 6 – 12 months has traditionally been accepted as a general ‘rule of thumb’.

The FWC has provided some flexibility on the issue, in its decision in James Chol v Vivesco Pty Ltd [2024] FWC 1220 (Chol). In Chol, the FWC upheld an employer’s dismissal of an employee for serious misconduct, despite the conduct having been brought to the employer’s attention and found to have been substantiated months earlier. The FWC also chose to overlook significant deficiencies identified in the termination process in dismissing the employee’s unfair dismissal application.

Summary

In short, Chol involved an employee who was dismissed in February 2024, including on the grounds of serious misconduct which was brought to his employer’s attention in December 2023. On 19 December 2023, the employee was found by the FWC to have:

“fat shamed” a colleague (Mr Tom Case),
called Mr Case a “liar” (without any basis), and
shouted at, and swore at, Mr Case, in a threatening way.

(together, Serious Misconduct).

Relevantly, the FWC found the Serious Misconduct remained a valid reason for dismissal – notwithstanding the lag between the Serious Misconduct and the employee’s dismissal – having regard to the “cumulative effect” of the employee’s (sometimes “bizarre”) subsequent behaviour. This behaviour included, by way of example, sending a “message [to another colleague] which showed a picture of an aeroplane with text stating that he was one of Australia’s wealthiest men and was flying to his billion dollar resort in Port Douglas.”

Ultimately, the employee was dismissed on 9 February 2024 for breaching the employer’s workplace harassment and bullying policy. In dismissing the employee’s application for an unfair dismissal remedy, the FWC’s Deputy President Colman said:

“…the fact that the company did not dismiss Mr Chol specifically because of the [Serious Misconduct] incident involving Mr Case does not mean that this behaviour was not a valid reason for dismissal in its own right. My conclusion in this case is that Mr Chol’s treatment of Mr Case was such a reason. Eventually a valid reason will lose its window of ‘currency’, but it would be wrong to punish leniency, and to encourage hasty dismissals, by adopting too narrow an approach to this window. In the present case, the window remained open. One factor in this conclusion is that Mr Chol’s treatment of Mr Case was the first of several incidents involving inappropriate conduct towards coworkers”.

(Our emphasis).

Procedural deficiencies outweighed

Notably, the FWC dismissed the employee’s unfair dismissal application despite finding “the termination process was clearly deficient”. These deficiencies included that the employee was: only notified of the reason for his dismissal after the fact; and not afforded an opportunity to respond to the allegations against him. Notwithstanding these deficiencies, Deputy President Colman said “…in my overall assessment these procedural deficiencies are outweighed by the valid reasons, and in particular the gravity of Mr Chol’s misconduct on 19 December 2023 [i.e., the Serious Misconduct]”.

Key take-out

Although the FWC’s decision in Chol turns on its own facts, it provides some flexibility to employers to extend the traditional ‘shelf-life’ or “window ‘currency’” of employee misconduct (including serious misconduct), for the purposes of effecting a valid dismissal. In any event, the decision challenges the notion employers must always proceed with a summary dismissal process where serious misconduct has occurred in the workplace.

Contact HTA Legal if you require any information or assistance with managing workplace performance or misconduct issues.