Australia: Employer must follow fair process even when employee commits heinous crime

Last Updated: 28 October 2016
Article by Murray Thornhill

Appearing in the Fair Work Commission via telephone from his prison cell late last month, a Victorian man complained of unfair treatment because he was sacked after pleading guilty to paedophilia. Perhaps unsurprisingly, the summary dismissal was held to have been fair and the case was dismissed. However, what may surprise some is that the dismissal was not held to be fair because the child sex crime was so heinous but because the employee's conviction received media coverage that destroyed any hope of the employee continuing his duties without causing damage to the employer's business. The FWC took the time to explain that criminal conduct outside of work hours does not automatically give rise to valid reason for dismissal, and criticised the employer for failing to provide procedural fairness to the employee. Vice President Hatcher decided in Joseph Wakim v Bluestar Global Logistics [2016] FWC 6992 that no compensation was warranted because even if proper procedure had been followed the summary dismissal was unavoidable and so the employee was no worse off.

When does criminal conduct warrant dismissal?

Out of hours conduct – including criminal conduct - can only form a valid reason for dismissal in very limited circumstances. The conduct has to be so serious as to amount to a rejection of the employment contract by the employee because it:

  • damages the employer's interests;
  • causes serious damage to the relationship between the employer and employee, or
  • is incompatible with the employee's duty as an employee.

Employment Untenable

Mr Joseph Wakim was a public figure known for his work promoting multiculturalism and working with troubled youth. When he pleaded guilty to indecently dealing with a child under 16 on 1 April this year it drew immediate media attention in the Herald Sun. Vice President Hatcher summarised the relevant media coverage as follows:

"The story's headline was "Former Victorian Multicultural Affairs Commissioner Joseph Wakim guilty of child sex offence", and featured a large photograph of him. He was described elsewhere in the story as founder of the Australian Arabic Council and a "prolific social commentator", and as being employed in a "senior position with a logistics company". It described him as having been charged with three offences involving a young boy including grooming, but that two of the charges were withdrawn and he had pleaded guilty to the charge of sexual penetration."

The media attention in this case was what gave legitimacy to the employer's decision to summarily dismiss Mr Wakim. Had the conviction not been widely known about and publicised then the reputation and viability of the business would not have been at risk. The FWC found:

"the public disclosure of Mr Wakim's offence rendered his continued employment untenable."

The Commission considered Mr Wakim's argument that he could have been given alternative duties that did not require him to interact with clients, however the Commission noted that it was not only clients but other employees who would seek to distance themselves from interactions with a child sex offender. The situation amounted to repudiation of the employment contract giving rise to this following valid reason for his dismissal:

"Mr Wakim's criminal conduct had the effect of irreparably damaging relationships with clients and other staff and rendered his continued employment untenable"

Employer's Failure to Seek Advice

It was not all clear sailing for the employer before the FWC however. Vice President Hatcher criticised the employer for failing to put the allegations to the employee and give him an opportunity to respond. The Commissioner found that this failure amounted to a breach of procedural fairness, and went on to say:

"Although Bluestar is not a small business, it did not have any dedicated human resource management specialists or expertise in the business at the time of the dismissal. It is clear that this affected the procedures it adopted in dismissing Mr Wakim. However Bluestar's size meant, in my view, that it could and should have obtained external advice as to how to afford procedural fairness before deciding to summarily dismiss Mr Wakim."

If the criminal offence for which Mr Wakim was sacked had not been paedophilia it is possible that the employer's failure to seek advice about what a fair process would constitute - when it had the capacity and resources to obtain such advice - may have been sufficient for the FWC to find that the dismissal was unfair. Employers should beware that even where very serious misconduct is discovered, procedural fairness is essential. The FWC may find that if proper process had been followed the employee may have had the opportunity to continue in paid employment for longer or even have managed to provide an explanation or undertaking that could have avoided the need for dismissal altogether. Where this the case the employee will be entitled to compensation at the expense of the employer, or perhaps even reinstatement.

Mr Wakim had already been on paid suspension for an entire month before he was dismissed on 4 May 2016. Interestingly, the Fair Work Commission did not take this period of paid suspension into account when assessing the procedural fairness of the dismissal process. If the employer had sought and received sound legal advice immediately upon reading about Mr Wakim's offending in the news Mr Wakim could have been fairly dismissed almost month earlier saving thousands in salary and superannuation that was effectively unnecessarily paid.

For the employer in this case however the gravity of the paedophilia conviction overshadowed the deficiencies in procedure and Vice President Thatcher found the dismissal was fair and reasonable.

"Had Mr Wakim been afforded procedural fairness, I do not consider that there is any reasonable possibility that he could have advanced any response which might have altered the outcome. His commission of the offence was an admitted fact and the consequences for his employment once his offence was publicised were obvious and unavoidable."

Tips for Employers

  • Consider including a clause in your employment contracts about standards of behaviour outside of work and/or a requirement to disclose immediately any criminal charges levied during employment.
  • Do not assume that serious criminal conduct necessarily forms a valid reason for dismissal.
  • Always provide an opportunity for employees to hear and respond to any reason for dismissal.
  • Seek legal advice early to ensure:
    • you pay no more in salary or entitlements than necessary prior to dismissal,
    • your decision cannot be found to be unfair, and
    • you cannot be ordered to pay compensation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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