Dismissal without due process costs employer in FWC decision
A decision handed down by the Fair Work Commission (FWC) on December 3, 2024, for an unfair dismissal remedy has demonstrated the importance of following procedural fairness.
The FWC found that despite the employer having a valid reason for termination, the lack of due process rendered it harsh and unjust, and so the employer had to pay the employee compensation of eight week’s leave totalling $20,000 plus superannuation.
Our employee relations experts examine the case and explain what it means for businesses.
Case facts
The applicant Roy Sabag was hired as a mechanical engineer by D&T Hydraulics and Engineering Pty Ltd on August 10, 2023. He had demonstrated a 3D modelling and automation technique, which the company expected him to teach to the team. However, Sabag denied he was hired for this purpose, instead that he had only shown the technique to his manager who could teach the rest of the team.
Two months into his employment, the applicant took five week’s leave to travel to Israel after the October 7, 2023, attacks. Due to flight cancellations, requested more leave and he returned later than expected. He later requested additional leave in April 2024 following a family member’s death, which was also approved. In total, he worked remotely from Israel for 123 days, which the employer found challenging due to time zone differences and the collaborative nature of his role.
Upon returning on May 29, 2024, Sabag participated in a meeting about implementing his technique. A disagreement ensued, with Sabag stating it was not suitable for multiple users. The employer claimed he acted aggressively and questioned colleagues’ credentials. The next day, the manager announced a plan to relocate the team to a shared space, referring to it as the “war room”. Sabag, offended by the term due to the Israel-Palestine conflict, refused to move his desk.
On June 3, 2024, the manager noted Sabag had not moved his desk and called a meeting to discuss the issue, as well as his behaviour in the previous meeting. Following an argument, the manager informed him of his termination. Sabag was given the option of a three-month performance improvement plan or one month’s pay in lieu of notice but refused both, seeking HR’s assistance. The HR manager conducted brief interviews and later that day issued a termination letter citing:
- Creating a serious and imminent safety risk to colleagues due to aggressive behaviour.
- Refusing a lawful and reasonable direction to move his desk.
Sabag was paid one week’s notice and lodged an unfair dismissal claim.
The decision
FWC Deputy President Nicholas Lake found that while Sabag was assertive in discussions and questioned colleagues in a direct manner, his actions did not constitute an imminent safety risk or aggressive behaviour warranting dismissal. A more appropriate response would have been disciplinary action rather than termination.
Regarding the refusal to move his desk, the FWC deemed the directive lawful and reasonable. However, the employer’s choice of words in referring to the space as a “war room” was poor, given Sabag’s personal connections. His refusal, combined with other factors – including his reluctance to share his technique, behaviour in meetings and lack of alignment with company objectives – constituted a valid reason for dismissal.
However, procedural fairness was not followed. The HR manager’s investigation was “hasty”, and Sabag was terminated without an opportunity to respond to the allegations.
Although the FWC determined there was a valid reason for dismissal, the absence of procedural fairness made it harsh and unjust. Consequently, Sabag was awarded eight weeks’ compensation amounting to $20,000 plus superannuation.
Key takeaways
This case underscores the importance of procedural fairness in termination decisions.
To follow procedural fairness when it’s alleged that misconduct has occurred, employers should:
- If serious misconduct is alleged, suspend the employee.
- Conduct a thorough investigation into alleged misconduct, including obtaining witness statements.
- If on the balance of probabilities the allegations have been substantiated, hold a formal disciplinary meeting to present allegations and allow the employee to respond.
- Consider the employee’s response before making a final decision.
- Clearly communicate the outcome following due process.
Failure to follow these steps can render even a valid dismissal unfair. In this case, had the employer adhered to procedural fairness, the termination may not have been deemed unfair, avoiding the compensation payout.
The importance of following procedural fairness before deciding to terminate an employee can save employers from receiving a successful unfair dismissal claim and having to reinstate and/or compensate the employee.
CCIWA strongly recommends that employers contact our Employee Relations Helpline on 08 9365 7660 or via [email protected] to seek advice prior to taking any action resulting in termination.
