Don’t take it so seriously – the difference between misconduct and serious misconduct

A pool supplies business in Sydney summarily dismissed its general manager for going “behind their back”, making disparaging comments about the business and “betraying the business”. Entram Pty Ltd accused its general manager of preventing a sale of business and breaching his implied duties to act in good faith.

Judge Shenagh Barnes of the Federal Circuit Court accepted the employee’s conduct amounted to misconduct; however, it was not found to warrant serious misconduct and, therefore, summary dismissal.

As a consequence, the employer was ordered to pay $30,283 in damages for failing to provide the employee with notice of termination.

For an employer, the key difference between terminating an employee for misconduct versus serious misconduct will be the provision of notice.

An employee who commits serious misconduct can be terminated on the spot and the employer will not be required to provide notice of termination.

An employee who is dismissed for misconduct must be provided notice of termination. They can be directed to work out their notice period or paid in lieu of notice, at the employer discretion.

As demonstrated by Jeavons v Entram Pty Ltd [2015] FCCA 3457 the consequences of summarily dismissing an employee for misconduct can be significant. Although the employee was terminated in June 2012, a judgment was not handed down until December 2015, meaning the business was in legal limbo for three and a half years. 

To protect your business and insure yourself against such penalties, speak to one of Nevett Ford’s workplace relations team members on (03) 9614 7111 about the right way to terminate an employee for misconduct and serious conduct.