Misconduct may differ between the two Australian workplace relations systems. Please refer to the relevant section below that applies to your workplace, either National or State.

The information below applies to workplaces under the National system.

Misconduct at work can represent a variety of behaviours which warrant a range of responses from written warnings to summary or instant dismissal. Where an employee is guilty of serious misconduct as defined under s.1.07 of the Fair Work Regulations justifying dismissal instantly, an employer is not obliged to provide the employee with notice of their termination or payment in lieu of notice, only wages up to the last day worked.
The law recognises an employee’s contractual duty of fidelity and good faith to their employer. Simply, this duty necessitates that the employee puts the interests of their employer first and does not behave in a way that benefits their own interests at the expense of the employer.
The Fair Work Regulations 2009 define serious misconduct as;

• Willful or deliberate behavior by an employee that is inconsistent with the continuation of the contract of employment, or
• Conduct that causes serious and imminent risk to the health or safety of a person; or the reputation, viability or profitability of the employer’s business including theft, fraud and assault.
• The employee being intoxicated (alcohol or drugs, other than prescribed drugs) at work.
• The employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

Furthermore, serious misconduct can also include (but not be limited to):

• Engaging in any conduct which is illegal while on duty and or on the premises of the employer.
• Possession of illegal drugs.
• Making threats of violence to fellow employees, clients, or suppliers.
• Deliberately damaging or misusing property or equipment.
• Serious and deliberate breaches of company policies.
• Serious and deliberate neglect in performing tasks or following procedures assigned to the position which may result in significant loss or damage to the employer or other employees.
• Deliberately carrying out duties in a manner which may cause injury to employees, customers or suppliers.
• Sexual harassment or other forms of discrimination.
• Engaging in sexual activity while on the premises.

In all circumstances of serious misconduct, it is critical that a full investigation and assessment be undertaken to prove ‘on the balance of probability’ the employee’s involvement before summarily dismissing them. Employers who fail to take action on any reports of misconduct as soon as reasonably practicable, risk condoning the misconduct. An employer’s rights are not prejudiced if the postponement is in relation to the time taken to investigate the allegation. Precise allegations should also be put to the employee by the employer advising them that their employment may be terminated if an adequate explanation is not forthcoming. If a full investigation is not undertaken then the employee may have grounds for an unfair dismissal claim as they have not been afforded procedural fairness.

Company policies
Policies and procedures must be lawful and mutually reasonable for the employee and the employer. This does not mean that all breaches warrant the action of instant dismissal. However, where an employer places significant importance on the possibility of termination for breaches of such lawful and reasonable policies to its employees, then any employee who knowingly breaches such a policy may find it difficult to prove there was no valid reason for their termination. Company policies must clearly state types of conduct or behaviour that will attract disciplinary action. For example an attendance and punctuality policy should state that an employee’s punctuality must be in line with the company policy, or repeated breaches of the policy may result in disciplinary action. 

Convictions
Previous criminal convictions or alleged misconduct of an individual must be considered in relevance to the position of employment and whether or not the conviction or misconduct breaches a term of the employee’s employment contract. The decision may also be affected by whether the employee was required to disclose any criminal convictions during the job interview stage but failed to do so. 

Theft/fraud
Misconduct involving deceit and fraud may validate an instant dismissal, especially for employees in roles with greater responsibility. For example, a dry cleaning employee stealing a few coat hangers would be disciplined with a verbal warning where more serious stealing by a company accountant or where an employee provides unauthorised intellectual property to a competitor may warrant a summary dismissal. Evidence is critical in supporting any serious theft allegations and should be submitted where necessary to validate summary dismissal decisions. Involvement of the police may even be needed in serious situations.

Drunkenness/drug taking
Employees whose positions involve operating dangerous machinery or driving pose a serious risk to safety if they are under the influence of alcohol or drugs at work. Company policies should clearly prescribe that the use of alcohol and drugs before or during work is prohibited and any breaches will result in instant dismissal for such employees. It may be more appropriate to progress through a warning process for other low risk employees who are proven to be under the influence of alcohol or drugs at work.

Employee refusing lawful instructions
Not all acts of wilful disobedience by an employee are considered serious misconduct warranting instant dismissal. In fact, an employee may be well within their rights to disobey an employer’s instruction if it poses a threat of danger or does not properly pertain to the employee’s capacity in which they were hired. However, an employee who premeditates a course of constant insubordination will justify an official meeting to discuss their reasons for disobedience. Where the employee has a legitimate reason for refusing an order, such as a defensible safety concern, then the employer should not dismiss the employee.
Where no legitimate reason is provided by the employee then the employer should progress through a series of written warnings that clearly request the disobedience to cease and indicate that further refusals may result in dismissal.

Fighting
In circumstances of fighting or violence in the workplace an employer needs to assess the relevant considerations and factors in which the fight occurred as well as other considerations such as the length of service of the employee/s, including their work record, whether they were in a supervisory position and include whether the employee was provoked or acted in self-defense. Although fighting does constitute serious misconduct it is important that employers consider safety and the context of the violent incident, rather than relying on strict company policy breaches, before determining the appropriate disciplinary action.

Lateness and unapproved absences
The collective effect on a business of an employee being continually late or absent from work may provide a justifiable reason for terminating the employee. However, relevant factors should also be taken into consideration for the validity of the termination including length and frequency of absences, whether or not the employee notified the employer in advance of the lateness/absence, the work environment, the position of the employee and any reasons for the employee’s lateness/absences. Summary dismissal is not usually the appropriate action for employee lateness or absence but can be justified if the employee knew that their punctuality was crucial and they were aware that any lateness would lead to a dismissal. Generally a series of warnings should be given to address this behavior before dismissal occurs.

Loss of license or qualifications
Some occupations require that the terms and conditions of employment are dependent on the employee maintaining a valid licence or qualification(s) to perform their role. There may be a valid reason for termination of employment where such licenses or qualifications lapse, rendering the employee legally unable to perform the job they were hired to do.  

Out-of-work conduct
Out-of-work conduct is becoming increasingly concerning for employers where such inappropriate conduct can pose a threat to an employer’s interests, even if there is no actual damage but a material risk of damage. Employers that have a legitimate concern regarding out-of-work conduct by an employee that is damaging to an employer’s business may constitute a termination of employment that is justified. Notwithstanding the existence of a valid reason, the individual circumstances will be considered in determining if a termination was harsh, unjust or unreasonable. Conversely, a number of cases have also included the vicarious liability of an employer for sexual harassment that occurred away from the workplace.

Facebook use by employees
Similar to ‘out-of- work conduct, a Facebook entry is taken seriously by the Fair Work Commission and the WA Industrial Relations Commission. Though Facebook entries might take place outside working hours, the entries remain on Facebook for many people to see during work hours and they remain there until they are deleted from Facebook. A recent Fair Work Commission decision demonstrated that an employee is not totally protected from workplace consequences if they post defamatory remarks or derogatory comments about other employees or their employer that could be seen to be damaging to the business. Companies need to ensure they have a strict social media policy in place to protect their businesses and ensure that all employees are aware of the consequences of posting information onto a public forum that has anything to do with their workplace, particularly if it is offensive or confidential information.

Dangerous conduct by employee
Summary dismissal may be justified in severe cases where an employee’s behaviour demonstrates blatant disregard and deliberate or gross negligence of safe work practices. In other instances an employer should proceed through a series of warnings culminating in dismissal if the unsafe acts continue. An employer should investigate all cases of dangerous misconduct to establish the negligence occurred as a result of the employee’s carelessness and not related to any unsafe work systems enforced by the employer.
 

Disciplinary actions for misconduct

Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of workplace health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have evidence for making the report.

Other dismissal
In other cases, an employer must give an employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job. The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
 

Small Business Fair Dismissal Code

Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to provide support and to assist. However, the other person cannot be a lawyer acting in a professional capacity as a representative. A small business employer will be required to provide evidence of compliance with the Small Business Fair Dismissal Code if the employee makes a claim for unfair dismissal to the Fair Work Commission, including evidence that a formal warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
In situations of termination and dismissals a small business employer must complete the Small Business Fair Dismissal Code and Checklist. A small business is defined as a business that employs fewer than 15 employees (under the Head Count test) irrespective of hours worked. The headcount includes casuals employed on a regular and systematic basis, employees of associated entities and the employee/s being dismissed.

The information below applies to workplaces under the State systemMisconduct at work can represent a variety of behaviours (as detailed above) which warrant a range of responses form written warnings to summary or instant dismissal. Where an employee is guilty of serious misconduct as defined under s.23A of the Industrial Realtions Act justifying dismissal instantly, an employer is not obliged to provide the employee with notice of their termination or payment in lieu of notice, only wages up to the last day worked.

Procedural matters
In discussion with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a  professional capacity as a representative. If a claim for unfair dismissal is lodged against the employer to the Industrial Relations Commission, the employer must respond by submitting a 'Notice of Answer' (Form 5), which allows the employer to give reasons and evidence for opposing the claim. Evidence can include written warnings, meeting minutes and other employee accounts.
 

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