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Lack of written warnings leads to unfair dismissal ruling

June 30, 2017

by Sid Sidhu and Troy Wild

Ashley Duddington v Mario and Clara Enterprises Pty Ltd and Morgan Trading Pty Ltd [2017] FWC 2958

Small business employers (employing less than 15 employees) are reminded by a recent case before the Fair Work Commission (FWC) to use the Small Business Dismissal Code (the Code) when terminating employees.

In this case, a restaurant manager who alleged that he was unfairly dismissed without notice has been awarded compensation, because of the employer’s failure to apply the Code. Despite evidence to suggest the employee had behaved in a manner not conducive to maintaining an employment relationship, the court could not overlook the importance of the Code and, in particular, the requirement to provide formal written warnings to employees.

Employer’s Argument

According to Mr Morgan, the owner of the business and a retiree, the applicant had received two prior warnings, including one based on customer complaints and another for whistling during service. Although he had apologised, he was also the subject of a staff complaint some time ago and would frequently ask the owner to leave the premises, which Mr Morgan found offensive and disrespectful. For these reasons, Mr Morgan argued that the employee was validly dismissed and given 2 weeks’ notice.

Employee’s Argument

The employee did not contest the staff or customer complaints but maintained that he had not received any formal written warnings in relation to these events. He also accepted evidence that he had told Mr Morgan to leave the restaurant on numerous occasions. However, prior to his dismissal, the employee queried Mr Morgan as to his superannuation and holiday pay entitlements. A few weeks later, he was called into a meeting with his employer and dismissed without any explanation or notice.

Fair Work Commission’s View

Where the evidence was in conflict, the FWC sided with the employee and held that the alleged conduct was not sufficiently serious to justify immediate dismissal. Where summary termination cannot be satisfied, the Code requires notice and procedural fairness to be provided. Contrary to his submissions, Mr Morgan could not produce evidence that written notices had been issued and did not submit that the employee was ever told that his job might be in jeopardy.

As such, the FWC held that the Code had not been complied with as the employee was not given lawful notice. Although there appeared to be a valid reason for termination (namely, asking the business owner to leave the premises), Mr Duddington was not notified of this reason or given an opportunity to respond. In the eyes of Deputy President Geoff Bull, “The absence of dedicated human resource management specialists or expertise in the enterprise had a substantial impact on how the applicant’s termination was effected and this has been taken into consideration.”

The full decision can be found here.

What does this mean for your business?

The Small Business Dismissal Code provides a comprehensive checklist for small business employers to ensure they are compliant with Fair Work law. Importantly, employees should be put on notice where their conduct may result in termination and provided with an opportunity to rectify their behaviour. If you are considering terminating one of your staff or would like further information on unfair dismissals, call the NRA today on 1800 RETAIL (1800 738 245).  


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