Written Warnings deemed as inadequate, Immediate Termination as too harsh – Considering Alternative Forms of Disciplinary Action for Employee Misconduct

Through company policies, agreements and codes of conduct, employers have the discretion to issue written warnings for minor employee misdemeanours, and in circumstances of extreme employee misconduct to immediately terminate the employee’s contract. However, a recent unfair dismissal claim demands a closer look at whether written warnings and on the spot termination is in fact delivering the right message to employees.

Employers have a duty of care to ensure that all employees feel safe whilst at work. It is common for companies today to enforce codes of conduct which highlight the importance of employees adhering to company values and mandate that every person is treated with respect, irrespective of race, religion, or culture. Given the recognised importance of equality in the workplace, any evidence of workplace bullying or harassment must always be investigated by employers.

The disciplinary action served against the employee should however be proportionate to the misconduct. This presents a difficult situation for both employers and employees for there is no middle ground in punishment, generally a breaching employee will either be provided with a formal warning or immediately terminated.

A recent example of this involved the termination of an operator at Chevron Australia who was on a bus traveling to a work project. During this time, the employee was discussing a sexual encounter that a friend had with an Aboriginal woman. The employee made reference to the woman as a ‘young gin’ with co-workers in rows in front overhearing the conversation. A complaint was lodged with employees on the bus claiming that they had felt uncomfortable hearing such comments. Chevron Australia proceeded to terminate the operator’s employment on the grounds that the conduct of the operator was a breach of the company’s anti-discrimination policy.

The operator contended that he had been unfairly dismissed for he did not realise that the word “gin” was derogatory in any context. The Fair Work Commission found that the “gin” reference constituted inappropriate workplace behaviour for it was offensive to the other employees in the vicinity. However, the immediate dismissal of the technician for that conduct was deemed by the Commission to be “harsh and unreasonable”. The Court reinstated the worker, however the employee was not entitled to claim for lost wages. The Court determined that it was important that the employee bear some financial consequence for the comment did effect his colleagues and he was in breach of company policy, therefore the financial consequences already suffered were to reduce the likelihood of the employee making another offensive comment in the future.

There is currently no precise definition of ‘disciplinary action’. Rather, it is up to the employer to exercise their own discretion based on Modern Awards, Enterprise Agreements and Employment Contracts. The above case however is evidence of the need for alternative forms of disciplinary action for misconduct, as sometimes immediate termination can be too harsh but a written warning is inadequate. It is for these reasons, that employers should consider going beyond the traditional forms of disciplinary action to incorporate in-between types of disciplinary action into their company policies. Some forms of action which may deliver a stronger take home message to employees following misconduct include denying the contravening employee of certain rights/benefits, demotion to a lower position, suspending that employee for a temporary period without pay, or withholding future bonuses. Ultimately, it is the duty of employers to find a balance in punishing employees for misconduct and to ensure that the workplace remains a safe place for all employees.