Turbulent Employees - Is a full history of misconduct required to Show Cause?

In brief - Turbulent employees might have a history of misconduct. If the business decides to initiate a show cause process, it can be difficult knowing exactly what you as an employer need to include. A recent decision by the Full Bench of the Fair Work Commission has shed some light. 

In mid-2022, a flight attendant supervisor from a prominent airline had her job reinstated after the Commissioner found several procedural deficiencies in the dismissal process. The Bench upheld the airline's appeal on all six grounds last month. 

Events leading to dismissal

Prior to her termination, an investigation run by the airline substantiated allegations that the supervisor was tardy, stole snacks, slept and watched a movie while on duty, as well as several breaches of the airline's Code of Conduct. 

Before this, the supervisor was subject to three other investigations with varying levels of severity.

The first investigation confirmed that the supervisor had accepted and misappropriated cash from a guest and a warning was given. Some months later, a second incident arose and caused the airline to issue a final warning. 

A third, lesser incident led to a 'resetting of expectations conversation'. This occurred peak-pandemic, and the parties mutually agreed the supervisor would voluntarily stand down. This arrangement continued for two months, until the supervisor returned on supernumerary duties. 

The events that led to her dismissal occurred soon after her return and in close proximity.

Procedural issues at trial

During the show cause process, the airline neglected to state that the prior warnings the supervisor had received were being taken into consideration. They were also not stated as reasons for dismissal in her dismissal letter. It relied only on that misconduct which arose after she had returned to duties. 

The Commissioner rejected submissions made by the airline that they were entitled to consider the supervisor's prior warnings whether or not this was expressly stated when deciding an appropriate disciplinary action.

As the supervisor was not notified of a material consideration in the airline's decision, the Commissioner went on to find that the supervisor was denied an opportunity to respond, and set aside the past conduct entirely.  

Given the close proximity of the conduct which led to her dismissal, the Commissioner found that the airline had wrongfully dealt with it "on an aggregate basis", where a warning might have sufficed. 

It ultimately found that there was no valid reason for dismissal. The decision to reinstate the supervisor was stayed awaiting an appeal, which was handed down in December. 

Appeal

The hearing decision was comprehensively picked apart by the Bench on appeal. The remaining discussion in this article will focus on the first ground of appeal, which concerned the Commissioner's decision to set aside past conduct. 

Error of principle

The Full Bench found that the Commissioner's decision was inconsistent with the prior decision in Newton v Toll. 

Newton found that "in determining whether there was a valid reason for the dismissal the Commission is not confined to the reason advanced by the employer … A valid reason for dismissal can be any valid reason underpinned by the evidence". 

The Bench in Newton went on to state that where the Commission has determined that there was a valid reason for dismissal not expressly advanced by the employer, then the Commission must "act judicially and accord the parties procedural fairness."

With respect to the Commissioner's decision that the dismissal was unfair, the Full Bench on appeal identified three key errors that resulted in a failure to properly balance the matters set out in section 387:

1. the prior warnings were a part of the factual matrix that the airline acted on to dismiss the supervisor: it was therefore entitled to rely on them as a relevant matter, and this was so regardless of whether they referred to the prior warnings in the show cause or termination process;

2. the Commissioner was bound to consider the prior warnings (and not set them aside), given they were facts that existed at the time of dismissal which justified the dismissal; and

3. there was no indication on the transcript of proceedings that the Commissioner was going to set aside consideration of the prior warnings, which amounted to a failure to accord the parties procedural fairness (as identified in Newton).

In summary, the Commissioner was bound to consider the prior warnings as they were a material consideration.

This case may serve as a clear guidance by which employers looking to dismiss employees with a history of misconduct.

Virgin Australia Airlines Pty Ltd v DeVania Blackburn [2022] FWCFB 232 (12 December 2022).