At MyHR, our HR advisory team has been dealing with many requests for help with cases of serious misconduct.
Lots of things, inside and outside the workplace, influence employee conduct and performance, but some unique factors are contributing to this current increase in serious incidents:
- Cost of living pressures: people are under more stress, leading to issues at work.
- Tight labour market and staff shortages: employers are doing all they can to keep people and matters that may have previously been addressed are being let go, so employee behaviour gets worse resulting in serious misconduct.
As its name implies, serious misconduct (or ‘gross misconduct’, as it is sometimes called) is serious and both employers and employees need to understand what it is, how it should be handled, and what the potential consequences are.
We’ve created this blog to look at misconduct and serious misconduct, what your obligations are, and advice for responding to instances when employee behaviour is majorly out of line with expectations.
Misconduct vs serious misconduct
There are two different levels of misconduct: misconduct and serious misconduct.
Serious misconduct is defined in the Fair Work Act as:
- “Wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment.
- 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.”
Misconduct, however, isn’t defined in legislation. It is typically minor and covers a whole raft of behaviour, actions or inaction, e.g. using inappropriate language, repeated lateness, breaching confidentiality, breaching clauses in the employment contract, unsafe behaviour. A single instance of misconduct would not be enough to justify terminating employment unless it was repeated.
Serious misconduct is serious because it has significant implications or consequences for the business and a single instance has the potential to damage or destroy the trust and confidence between an employee and employer to such an extent it would be impractical and unreasonable for the employment relationship to continue.
Serious misconduct usually involves the employee doing something deliberately, however, there may be instances when an employee doesn’t act, or acts so recklessly, that it amounts to serious misconduct.
When you terminate a person’s employment on the grounds of serious misconduct, you aren’t required to provide any notice of termination, but you do have to pay the employee all outstanding entitlements, e.g. payment for time worked, annual leave, and possibly long service leave.
Examples of serious misconduct
Serious misconduct includes, but is not limited to:
- Theft.
- Fraud.
- Assault.
- Sexual harassment.
- Intoxication or use of illegal drugs at work.
- Causing serious and imminent risk to the health and safety of another person.
- Repeated failure to follow a lawful and reasonable instruction.
- Deliberate destruction of company property.
- Actions that seriously damage the business’ reputation.
- A serious breach of company policy or procedure.
Your legal obligations
Employers are obliged to take allegations of serious misconduct seriously. Under the Fair Work Act, you are entitled to dismiss an employee without notice for serious misconduct but be aware that because the person’s employment is at stake, the burden of proof is high. So you should always:
- Have reasonable grounds (i.e. strong reasons for believing the person has behaved this badly).
- Conduct a full and fair investigation, without predetermining what the employee may or may not have done.
- Follow due process and allow the employee an opportunity to respond to any allegations.
- Only once you’re sure the employee’s misconduct amounts to serious misconduct can you move to dismiss them without notice.
Learn more about terminating employment correctly.
Our tips on handling serious misconduct
Have clearly-defined policies and expectations
We don’t recommend having separate company policies on disciplinary process or misconduct, as these can be too inflexible and trip you up when managing disciplinary issues (if you don’t follow your policy to the letter).
What we do recommend, however, is having clear policies relating to key topics such as bullying & harassment, Health & Safety, use of company property etc. These will clearly outline what you expect of your people as well as the consequences if they don’t meet those expectations.
Keep the policies up-to-date and make sure all employees are aware of them and can access them easily. Everyone in the business needs to be on the same page.
Include a clause in the employment contract
You don’t have to include a clause in your employment contracts that covers summary dismissal (instant dismissal) in the event of serious misconduct, but having the clause will make your expectations clear and the decision for a summary dismissal more reasonable, so long as you always follow fair process in reaching that decision.
Don’t assume you know what happened
It’s essential to be objective and approach any allegations of misconduct with an open mind to find out what happened. Even if the facts of the case appear obvious, you must still investigate fairly, consult with the employee, and consider their response in making a decision.
If you terminate the employment relationship without undergoing fair and reasonable process, the employee could have a very strong case for unfair dismissal and you could end up having to pay them money (decisions by the Fair Work Commission demonstrate that even if the employee was found to have been in the wrong, employers who make procedural errors can face significant penalties and have to reinstate the person).
Did we mention fair process?
It can be difficult to distinguish between misconduct and serious misconduct, however having sound policies and following robust process can sort it out and ensure you reach a fair and justifiable decision.
Don’t be unfair, too hurried, or too harsh. You can’t fire an employee for a minor breach of workplace rules or company policy.
You must investigate the incident and then raise your concerns with the person. They may well dispute the allegations. Natural justice requires giving employees a reasonable opportunity to present their side of the story (and bring a representative or support person if they want).
You also need to genuinely consider their explanation or other mitigating factors in your decision and weigh up whether the act or conduct has damaged the employment relationship to such an extent that it can’t continue.
Remember, the process by which you manage and analyse the concerns or allegations is as important as the concerns themselves.
Find out more about getting the disciplinary process right.
Get good advice
If you believe an employee has committed serious misconduct and you may have to terminate their employment, get expert advice to ensure the process you follow is fair and you reach the right conclusion.
Any people management issue can be handled by MyHR's expert HR advisors, including guidance on disciplinaries, termination, and mediation. Get in touch today to learn how we can help.
