Failure to follow dismissal policy results in compensation to employee

A Fair Work Australia (FWA) decision this month has emphasised the need for employers to apply their policies when perceived misconduct of an employee is under investigation.

In this case, an employee was dismissed for an alleged theft of product from a jewellery store.  The employer had several policies in place, one of which outlined a formal process for investigation of a staff member where theft was alleged. 

As a consequence, the manager of the store undertook an investigation of the employee.  This included obtaining receipts from all store employees of their staff purchases, checking the stock systems against register receipts for discrepancies and speaking to members of staff who witnessed the event in question.  The manager could not wholly conclude that the employee had stolen jewellery.  However, she did conclude that the employee had permitted the jewellery to be taken from the store without being immediately paid for, which was in breach of one of the policies.  The manager as a result terminated the employee.

FWA considered the employer’s investigation policy and its implementation and concluded that the manager had applied these policies liberally and had not complied with each step of the outlined process.  Such missed points included appointing an impartial person to carry out the investigation, obtaining statements from any witnesses and advising the employee that they were entitled to have a witness present during the investigation.

FWA concluded that as a result there was not a valid reason to terminate the employee.  FWA said that had the employer’s policy been applied more stringently, the employer may have reached a different conclusion.

FWA accepted that re-instatement of the employee was inappropriate in the circumstances and awarded the employee 17 weeks wages compensation.

This case serves as a reminder for the workplace that policies and procedures must be adhered to, especially when dealing with the investigation of an employee’s conduct which could result in the employee’s dismissal.  It is imperative that employees follow due process to ensure that any dismissal is a ‘fair go all around’.

Should you wish to know more about dismissals, please contact either Ian Curlewis, Partner, on 9288 6756 or or Michael Jensen, Senior Associate, on 9288 6944 or

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.