Bunnings had a valid reason to dismiss a storeman who grabbed a 69-year-old colleague around the throat during an argument over a customer order. The Fair Work Commission accepted that the reason was valid. It still found the dismissal unfair, because of the way the investigation and the disciplinary process were run. The case is a warning for every Australian employer: in unfair dismissal law, the process around a decision can matter just as much as the reason for it.
What happened at the Bunnings trade centre
In Fitzpatrick v Bunnings Group Ltd T/A Bunnings [2014] FWC 1869, decided on 26 May 2014, Michael Fitzpatrick, a 52-year-old storeman, had worked at Bunnings' Welshpool Trade Centre in Western Australia since October 2005. On the morning of 26 September 2013, a dispute with a colleague, 69-year-old Jeff Simmonds, over paperwork for a customer's bath order got out of hand. The exchange degenerated into both men swearing at each other, and Fitzpatrick followed Simmonds into the transport office. Simmonds said Fitzpatrick grabbed him around the throat and pinned him against a desk. Fitzpatrick said he grabbed the older man's jacket to restrain him because he thought he was about to be punched. A team member, Alysha Guerriero, heard the noise and ran in. Her evidence was that she saw Fitzpatrick holding Simmonds against a desk with one hand while the other was raised in a clenched fist, and that she stepped between the two men and walked Fitzpatrick out of the office. Simmonds, for his part, said the incident was over quickly and that he suffered no injury.
Both employees were suspended that day and asked to provide written statements. Managers met with an HR coordinator on 1 October 2013 to review the statements, and a meeting with Fitzpatrick was arranged for the following day. The two managers running the matter were not newcomers to it. Nine months earlier they had investigated a separate allegation that Fitzpatrick made threatening comments to an employee of an external supplier, an incident that was raised again during this investigation. That meeting is where the process unravelled. Part-way through, the managers adjourned so they could stage a re-enactment of the incident, with two other employees playing the roles of Fitzpatrick and Simmonds. Fitzpatrick was not told the re-enactment was taking place and was not present. When the meeting resumed, his employment was terminated with immediate effect for serious misconduct. He was given no written reasons for his dismissal, and the Commission was shown almost no written record of the investigation.
A valid reason, or a fair process?
Fitzpatrick applied for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Cth). Section 385 of the Act defines an unfair dismissal, and s 387 lists the criteria the Commission must take into account in deciding whether a dismissal was harsh, unjust or unreasonable. They include whether there was a valid reason for the dismissal related to the employee's capacity or conduct, whether the employee was notified of that reason and given an opportunity to respond, whether the employer unreasonably refused to allow a support person, whether warnings were given where performance was the issue, and any other matters the Commission considers relevant.
On the facts, Commissioner Cloghan was satisfied there was a valid reason. A valid reason is one that is sound, defensible and well founded, the test drawn from Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371. On the balance of probabilities, Fitzpatrick had threatening physical contact with Simmonds, and the incident was serious enough that summary dismissal was open to the employer. But a valid reason is only one of the criteria in s 387. The Commission found the dismissal harsh, unjust and unreasonable because of the process failures. The investigation and the disciplinary decision were rolled into one meeting. The specific allegations were never put to Fitzpatrick in writing, so he could not respond to them properly. The re-enactment was conducted without him, so he could not contest the version of events it produced. One of the two investigators had witnessed the lead-up to the incident and had investigated an earlier incident involving Fitzpatrick nine months before, creating at least a perception of bias. And no adequate written record of the investigation or of the reasons for the dismissal was kept.
The Commissioner was blunt about what had gone wrong. The HR function had left two managers with no formal investigation training to sort the matter out, an approach he likened to sending students on a bushwalk without a map or compass. He also observed that the re-enactment was no more than Guerriero acting out her own written statement, and that deciding the facts that way, without letting Fitzpatrick contest them, was like accepting that a ball was red because one witness said so. Because reinstatement was inappropriate in light of the conduct, compensation was ordered, with the amount to be determined in a further hearing. The misconduct itself was not forgotten: s 392 of the Act requires the Commission to reduce compensation by an appropriate amount where the employee's misconduct contributed to the dismissal.
Why your dismissal process matters
The Bunnings case matters to every business that disciplines or dismisses an employee, because it isolates exactly where a defensible decision becomes indefensible:
- A valid reason is only one of eight matters under s 387: Bunnings passed that test and still lost the case.
- An unfair dismissal remedy can cost up to 26 weeks' pay: s 392 caps compensation at the lesser of 26 weeks' remuneration and half the high income threshold, so the exposure for a mid-level salary is substantial.
- Most employees only need six months' service to be protected: the qualifying period in s 383 is six months for most employers and 12 months for small business employers, so a dismissal can be challenged sooner than many owners assume.
- The clock starts immediately: an application must be made within 21 days of the dismissal taking effect under s 394, which means a claim can be on the Commission's table before the business has finished telling its side of the story.
- Procedural fairness is built into the Act: the object of the unfair dismissal provisions is a fair go all round, and the Commission treats process failures as capable of turning a valid dismissal into an unfair one.
None of the steps that cost Bunnings required great expense. Written allegations, a record of the investigation, and a disciplinary meeting kept separate from the decision are cheap. What they buy is the ability to show the Commission that the decision was made fairly, which is precisely what Bunnings could not do.
Process fixes you can make this week
Five low-cost fixes address each failure in the Bunnings process:
- Put the allegations in writing: before any disciplinary meeting, set out the specific conduct alleged and the possible consequences, so the employee can respond to something concrete. In the Bunnings case the allegations were never reduced to writing.
- Separate the investigation from the decision: the employee's response should be heard before any decision is made, and a person who witnessed the incident should not lead the investigation. Bunnings rolled both into one meeting, and its witness investigator created a perception of bias.
- Let the employee respond to the evidence: anything gathered during the investigation, including any re-enactment or reconstruction, should be put to the employee for comment. Fitzpatrick could not contest a re-enactment he did not know about.
- Offer a support person and record the meeting: s 387 treats an unreasonable refusal to allow a support person as a relevant factor, and a contemporaneous file note or meeting record shows the Commission that a process was followed.
- Get expert help before serious misconduct dismissals: summary dismissal is high stakes, and the Commission will ask what expertise was brought to the process. The managers in the Bunnings case had no formal investigation training and no documentation to rely on.
How a lawyer helps you get the process right the first time
Most of the failures in the Bunnings case were avoidable with advice before the decision was made. A lawyer reviewing a proposed termination works through the threshold questions first: is the employee protected from unfair dismissal, which turns on length of service and whether the employer is a small business; is the dismissal based on conduct, capacity or redundancy; and does the evidence actually support the reason being relied on?
For the process itself, a lawyer can draft the letter of allegations, plan the investigation, advise on who should conduct it and what evidence should be gathered, and prepare the structure and records for the disciplinary meeting. Where the investigation is complex, or the employee is represented, that structure is what makes a dismissal defensible. If a claim is lodged despite all of that, a lawyer can represent the business in the Commission's conciliation and hearing process, including negotiating a settlement and making submissions on remedy, where the compensation cap and the employee's own conduct in mitigation both come into play.
The cost of advice is modest compared with what an unfair dismissal finding costs: up to 26 weeks' compensation, management time, and the disruption of defending a claim. The value of a lawyer here is making sure the process is defensible before the decision, rather than trying to repair it afterwards, which is exactly the position Bunnings found itself in.
The misstep that cost Bunnings
Bunnings did not lose because it dismissed Fitzpatrick. It lost because it never put the allegations to him in writing, ran the re-enactment without him, and kept no record of its reasoning. When the Commission asked whether the process was fair, there was nothing to point to. A valid reason, badly processed, is still an unfair dismissal.
If you are facing a dismissal, work through the s 387 criteria before you act. Confirm the employee is protected, check the reason is sound, put the allegations in writing, hear the response before deciding, offer a support person, and record everything. The employee has 21 days from the dismissal to apply to the Commission, and remedies can reach 26 weeks' pay. The Bunnings case shows that the process is part of the decision, so treat it that way, and take advice before you terminate for serious misconduct.