By Laura Sowden, Partner, Anna Ly, Associate, and Theresa Au, Law Graduate

A recent decision has demonstrated that while Employers may have a valid reason for termination and consider community standards are on their side, a termination can still be unfair even when due process is followed.[1]

What Happened

In early 2021, an adult male Employee of Sydney Trains was charged with two crimes, common assault and sexually touching a child between 10 and 16 years of age because he had hugged a young student (the Student) in the station concourse while she was on her way to school.

It was also alleged that the Employee had kissed the year 8 Student on the neck at the same time he hugged her. He was suspended from employment with pay, pending an investigation.

The Employer engaged an external investigator to investigate the incident and determined that the Employee had acted in breach of the Company’s Code of Conduct. The Employee was subsequently convicted and sentenced in the NSW Local Court and terminated from employment.

The Employee appealed against the conviction and sentence in the District Court of NSW and it was accepted on the basis that CCTV footage did not indicate the Employee had kissed the Student. The Employee was found not guilty.

 The Employee then made an unfair dismissal claim in the Fair Work Commission (the Commission) seeking reinstatement to his former position. It should be noted that the Employer “must be uncompromisingly  vigilant about matters of child protection” as reflected in its policies and procedures to keep staff and customers (particularly children) safe, in addition to the action it took against the Employee.

The Employee was employed with Sydney Trains for nine years and had no prior disciplinary issues with his Employer. The Employee provided evidence demonstrating his work ethic and was a “conscientious public servant”.

 What was in Dispute

The Commission had to determine whether the Employee was unfairly dismissed.

In order for a dismissal to be considered unfair, the Commission considered the factors prescribed in s 387 of the Fair Work Act 2009 (Cth).

There was CCTV footage of the incident and its interpretation was key in the decision. The student maintained that the Employee kissed her on the neck and hugged her. The Employee denied the kiss. The CCTV was unclear as to whether the Employee had kissed the student on the neck.

The Commission did not accept there was a kiss on the Student’s neck, thus that allegation was not made out and not a valid reason for termination.

The Commission concluded there was a hug of the Student by the Employee. The hug was admitted by the Employee and admitted as inappropriate. The Employee was notified of this as a reason for dismissal and provided with the opportunity to respond to the dismissal.

The Commission has the discretion to take into consideration other matters it considers relevant and in this case the Commission considered the degree of seriousness of the misconduct and matters of mitigation. In this case the Commission considered:

• the belief by the Employee that the Student was seeking to hug him (the Student denied this);
• the uncertainty from the Employee on how to interact with children where no training on point was provided by his Employer;
• the length of the Employee’s service (9 years);
• his exemplary record and history of satisfactory if not commendable dealings with the Student.

Outcome

While it accepted the Employee hugged the Student, and that the hug was inappropriate the Commission found the dismissal was harsh and unreasonable, and therefore unfair. The dismissal was harsh and/or unreasonable without issuing a warning first.

The Commission made orders to reinstate the Employee to his position at the same railway station but was also prepared to reinstate him to the same level but at a different station.

The decision was appealed by the Employer with a full bench to determine the outcome.

What to take away

 Navigating misconduct can be difficult and there can be a disconnect between community standards within which employers must operate and the Commission decision making.

• Employers may be required to train its employees on what may seem obvious in the circumstances, i.e. do not hug children while at work.
• A decision to dismiss an employee may be valid but still unfair having regard to all the factors considered by the Commission.
• Other court proceedings may impact employers’ decision making, and those cases may be determined after an employer’s decision is taken.
• The standard of proof being beyond reasonable doubt for criminal offences should be distinguished with the balance of probabilities in civil cases such as that before the Commission.

[1] Merhej Elali v Sydney Trains [2022] FWC 2757