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Procedural fairness or systemic apprehension? Why it’s important to follow key procedures when terminating employment contracts

Author: Robert Lamb
3 min read
13 September 2019

Key Takeaways

  • How a recent case with Virgin Australia shows why it’s important to follow the procedures set out within the Fair Work Act
  • In Q1 FY2018-19, there were 3,853 unfair dismissal claims lodged with FWC, yet only 172 made it to hearing
  • There are fair guidelines established for employees to challenge their dismissal short of an unfair dismissal claim

Often employers can be fearful of action being taken against them if they dismiss an employee who they feel has done something to justify termination of their employment.

And in some respects, this fear is completely understandable.

In the quarter from January 1-March 21, 2019, there were 3,583 unfair dismissal claims filed with Australia’s Fair Work Commission (FWC).

However, only 172 of those claims (around 5 per cent) made it to hearing with the other 95 per cent of claims either settled or withdrawn prior to hearing. 

In some circumstances, an employer will settle a claim because they want to get on with their business and avoid spending further money, even though the termination was, at least in the employer’s mind, justified.

A recent case from the FWC has shown that if an employer follows the procedures set out in the Fair Work Act, they will be protected.

This is most recently exemplified in a dismissal by Virgin Australia. 

It was alleged that two employees stole two cigarette packets from a flight’s freight hold. In order to consider the allegations, Virgin Australia suspended the two employees on full pay and conducted an investigation.

Despite a lack of CCTV evidence, Virgin Australia concluded that the two employees had stolen the two packets of cigarettes. As a result of this conduct, both employees were dismissed for serious misconduct.

Both employees brought unfair dismissal claims in the FWC alleging their dismissals were harsh, unjust or unreasonable.

The FWC upheld the dismissal of both employees.

The Fair Work Act outlines mainly in Sections 387(b) to (e) the precise requirements for procedural fairness to be afforded to employees.

Procedural fairness, sometimes also referred to as natural justice, is an employer giving an employee a fair and reasonable opportunity to respond to evidence or allegations made against that employee by an employer who wishes to terminate their employment.

In the case mentioned above, the employer notified both employees of the their dismissal and the reasons for their dismissal as required by section 387(b). Both employees received a letter setting out the allegations against them and Virgin Australia invited them to respond in writing as required by section 387(c).

Both employees availed themselves of that opportunity. 

The employees were afforded an opportunity by Virgin Australia to have a support person attend the disciplinary proceeding as required by section 387(d).

As serious misconduct was alleged, under section 387(e), the employees were not required to be warned about their unsatisfactory performance before their dismissal.

The FWC then considered the criteria in sections 387(f), (g) and (h) and 381 of the Act which were: 

  1. The nature and size of the employer;
  2. Any other matters that the Fair Work Commission considers relevant and;
  3. The needs of the business and the employees and to ensure that everyone is given a fair go all round.

The FWC upheld the dismissals of the two employees because Virgin Australia followed the strict procedural fairness requirements. 

This case shows that provided procedural fairness is afforded to employees, and can be proven or evidenced, then the Fair Work Commission will protect employers who comply with the Fair Work Act. 

We have extensive experience with assisting employers in situations such as this, including leading employers through the correct steps to provide procedural fairness if considering the termination of an employee’s employment.  Let us know if we can assist.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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