A case from 2018 highlights several problems connected with dismissal of employees, and led to a costly unfair dismissal payout for employers.

The case was that of Knutson v Chesson Pty Ltd. Chesson P/L trades as PayPerClick and specialises in performance-based digital marketing solutions.

Chessons’ failure to follow correct disciplinary and termination procedures when dealing with Ms Knutson cost them compensation of $22,882 after the Fair Work Commission determined that she was unfairly dismissed.

What happened?

Chessons sought to vary Ms Knutson’s hours of work from 9.00am – 5.00pm (with a half hour lunch break) to 9.00am – 5.30pm (with a one hour lunch break) Their stated reason was that the business required staff to be flexible and in particular the business needed to be responsive to clients’ demands between the hours of 9.00am to 5.30pm and if the employee could not accept that, the employer needed to find staff that would support the business as it grows.

However Ms Knutson refused to accept the proposed changes to her hours of work because it would preclude her attendance at pre-paid pilates classes on certain days.

To cover the problem, she proposed that on Mondays and Wednesdays she would work until 5.15pm rather than 5.30pm, with a correspondingly shortened lunch break on those two days.

The employers refused to consider the compromise and Ms Knutson refused to sign the amended contract. The employer then promptly terminated her employment.

When this case came to the Fair Work Commission (FWC), three factors emerged, showing that Chessons could hardly have acted with less regard of Fair Work Act requirements.

  1. The FWC found that there was no satisfactory explanation of any business or commercial requirement for such a rigid approach to the later finish times. The employer’s reason for the dismissal was therefore not considered sound, defensible or well-founded. In finding the dismissal unfair, the FWC criticised the employer for adopting an inflexible position on the matter, despite the employee providing a reasonable explanation for the arrangement and agreeing to work later every other day. The FWC found it regrettable that the employer did not pursue any further compromise even if for a fixed period of time which might have coincided with the prepaid Pilates classes. The Commission observed that employers may not unilaterally make changes to an employee’s terms and conditions and employees are entitled to contest changes being introduced. The Commission found that there was no satisfactory explanation of any particular business requirement for such a rigid approach.
  2. Commissioner Cambridge found the notification of the dismissal by email was “unnecessarily callous”. given the seriousness of the subject matter and despite the employer being a small business which permitted some degree of informality. His complete statement on the matter of email dismissal was as follows: “The employer provided notification of dismissal by email communication sent at 8.53 pm on 6 November 2017. Notification of dismissal should not be made by email communication. Unless there is some genuine apprehension of physical violence or geographical impediment, the message of dismissal should be conveyed face to face. To do otherwise is unnecessarily callous. Even in circumstances where email or electronic communications are ordinarily used, the advice of termination of employment is a matter of such significance that basic human dignity requires that dismissal be conveyed personally with arrangements for the presence of a support person and documentary confirmation.”
  3. The FWC also criticised the employer for refusing to pay the employee personal leave after she submitted a medical certificate during the notice period, which rendered her dismissal a summary dismissal, usually only meted out to employees who have grossly misbehaved. None of the conditions applied to Ms Knutson.

The Fair Work Commission’s comment

Not surprisingly, the FWC considered that what appeared to be an almost trivial matter had now become an “issue” demonstrating the employer’s dissatisfaction that the employee had challenged various terms of the revised contract”.

Takeaways for employers

  • Ensure your relevant policies and procedures are up-to-date and regularly communicated to staff.
  • Review the scope and significance of the obligations of the employee involved when canvassing disciplinary options, including dismissal.
  • A failure to exercise caution and care when applying termination procedures can lead to a costly unfair dismissal payout.
  • Electing to dismiss your employee without notice (as Cressons did) isn’t a decision that should be made lightly. Although the Fair Work Commission will assess a case according to its individual facts and circumstances, exercising prudence and diligence will always go a long way to avoiding costly unfair dismissal applications.

If you find yourself up against an unfair dismissal case it is vital to gain expert legal advice immediately. If you need help, contact us at JFMLAW on 02 9331 0266 or email front.desk@jfmlaw.com.au

John Morrissey