The importance of having a Valid Reason

Recently the Full Bench of Fair Work Australia emphasised the importance of having a “valid reason” when dismissing an employee.

In Wililo v Parmalat Food Products, Commissioner Carghill found that whilst Parmalat had a valid reason to dismiss the employee, the procedure used was unfair and therefore, the dismissal was unfair.

The employee, a forklift driver, was dismissed for placing part of his body under an unsecured load in breach of safety regulations. Parmalat had security footage of the incident which it didn’t show to the employee when questioning him. Instead it asked the employee about the incident and found his recount of events to be false based on its observations of the footage. It then dismissed the employee for serious misconduct.

Commissioner Cargill found the dismissal was unfair because the driver hadn’t being shown the security footage and given a chance to respond. She also demoted the employee’s actions to be “careless acts” rather than “wilful or neglectful”.

Parmalat appealed. The Full Bench found that the employee’s actions were serious misconduct and Parmalat had a valid reason to dismiss him. They said "Clearly disciplinary action was necessary and appropriate because a failure to do so sends a message to the workforce that safety breaches can occur with impunity." They further said “The employer's failure to show the employee the CCTV footage was not significant, while the fact that the employee's conduct was negligent rather than deliberate did not render it less serious.”

The Full Bench said that where there’s a valid reason and it can be shown that the employee has been afforded procedural fairness, it was “inconceivable that a conclusion could be reached that termination of employment is harsh”. This could only be found where there were significant mitigating factors which were not present here. Therefore, the dismissal was not unfair.

Key Points: The fairness of a dismissal will be determined on whether there’s a valid reason that is “sound, defensible or well-founded”; that procedural fairness has been followed and whether additional mitigating factors have been considered.