Termination of employee unfair and unreasonable despite serious misconduct

Published 14 September 2016

An employer was ordered to pay one-week remuneration to a dismissed employee after the Fair Work Commission found the termination was unfair and unreasonable despite serious misconduct due to the erroneous approach taken by the employer.

Mr Jimenez commenced employment with Accent Group T/A Platypus Shoes (Australia) Pty Ltd (“The Respondent”) as an Assistant Store Manager. He reportedly performed this role admirably and was promoted in August 2015 to Store Manager after acting temporarily in this position.

On 27 May 2015, Mr Jimenez established a layby payment for a pair of shoes from the store. The company policy required all laybys to be completed within 60 days. Mr Jimenez failed to complete the layby within the time period, and further, wore the shoes without completing the layby.

On 7 September 2015, Mr Jimenez made a sale of two New Balance shoes to a friend and customer of the store. He received payment of $220 in cash, however he did not record this transaction until seven days after the sale. Furthermore, he applied the family discount to the purchase despite the customer not being a family member of Mr Jimenez.

In addition, Mr Jimenez failed to comply with timekeeping and recording practices by failing to “thumb in and out”.

On 19 September 2015, the Respondent advised Mr Jimenez that he would be required to attend a meeting on 21 September 2015. The Respondent deceived Mr Jimenez into believing he would receive good news when in actuality, he was informed of three allegations against him, including theft and fraud in relation to the sale and discounting of the New Balance shoes and the uncompleted layby, and placed on paid suspension. The next day he was informed of another two allegations, including the alleged falsifying of time records.

Mr Jimenez, through his lawyer, provided written responses to the five allegations of misconduct and at a meeting on 9 October 2015, the Respondent reviewed these responses. After a break in the meeting, Mr Jimenez was summarily dismissed. The letter of dismissal was prepared prior to the meeting, evidenced as it mentioned Mr Jimenez’s lawyer as Mr Jimenez’s support person, when he had instead brought a friend.

Mr Jimenez claimed the dismissal was harsh, unjust and unreasonable because he was given insufficient notice, was lured to the meeting by deceit, the evidence did not support the claim that Mr Jimenez had engaged in “deliberate criminality” and the Respondent’s finding of serious misconduct would impact his prospects of obtaining further employment.

The Respondent claimed the dismissal was not harsh, unjust or unreasonable because of the theft and fraud in the sale and discounting of the New Balance shoes, the theft in relation to wearing the layby shoes when the layby had not been completed and failing to adhere to timekeeping practices. The Respondent claimed these events constituted serious misconduct.

The Commission heard from a former employee of the Respondent who submitted that the family discount “was used to help close the sale with friends, family, and loyal VIP customer[s].” She confirmed that all purchases were processed immediately through the till without exception. Additionally, she stated there was no strict adherence to the 60-day layby rule.


The Commission found that the discounting of the New Balance shoes did not constitute serious misconduct as it was common practice to apply the discount to friends and loyal customers. The failure of Mr Jimenez to complete the layby within the time period also did not constitute serious misconduct as the layby policy was not strictly adhered to and it was often altered or pushed back for customer or staff. Therefore, neither of these allegations established a valid reason for termination.

The generalised accusations made by the Respondent regarding Mr Jimenez’s failure to correctly record the hours he worked was not a valid reason for termination as a lack of detail and specificity meant serious misconduct was not established.

Mr Jimenez’s failure to immediately process the cash payment of the New Balance shoes was found to constitute serious misconduct and was a valid reason for dismissal. However, the Commission found the allegation of theft made by the Respondent was unfounded.

Although there was a valid reason for dismissal, the Commission ruled the dismissal to be unfair and unreasonable because the Respondent adopted an erroneous approach, namely deceiving Mr Jimenez as to the nature of the first meeting, refusing to allow Mr Jimenez access to a support person at the first meeting, having already made a decision to dismiss Mr Jimenez on the meeting where they were supposed to be evaluating Mr Jimenez’s response to the allegations and applying a level of severity of the misconduct inconsistent with allowing Mr Jimenez to work a shift on 20 September 2015.

The Commission ruled the dismissal was unfair and unreasonable, however reinstatement was not possible due to the loss of trust and confidence in Mr Jimenez as a result of the serious misconduct. Consequently, the Respondent was ordered to pay one week remuneration to Mr Jimenez.

Read the full decision here

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