Chebbo v Major Crane Logistics Pty Ltd: a case reminder of the requirement of a proportionate response to employee misconduct

KEY TAKE OUTS

• A recent Fair Work Commission case of Chebbo v Major Crane Logistics Pty Ltd [2021] FWC 6693 serves as a reminder for employers that any disciplinary action taken against employees must be considered proportionate to the employees actions.
• In this case, the Fair Work Commission found that whilst the employer did have a valid reason to dismiss the employee, a summary dismissal was not proportionate to the reason.
• The Fair Work Commission therefore ordered that the dismissal was harsh, and as such the employee was awarded payment of his notice period of 4 (four) weeks pay less tax.

A recent Fair Work Commission case of Chebbo v Major Crane Logistics Pty Ltd [2021] FWC 6693 demonstrates the necessity for proportionate disciplinary action in cases of employee misconduct, as well as what may be considered when assessing conduct of an employee as bringing the company into disrepute.

The events leading to dismissal

The applicant, Mr Chebbo, filed an unfair dismissal application with the Fair Work Commission after his employer, a crane company, terminated his employment on 21 September 2021. Mr Chebbo attended a protest on 20 September 2021 outside the Construction, Maritime, Mining and Energy Union (CFMMEU) protesting the SA state government directives that:

1. construction site tea rooms are to be shut
2. that the union was discussing potential 6-hour shifts without breaks, and;
3. the vaccination of construction workers.

Mr Chebbo alleged that after he returned from the protest, he had a discussion with the company’s managing director, who (he alleged) encouraged the protest and that he should ‘fight for his rights’. However, the managing director and another employee gave contrary evidence that this was not the subject matter of this meeting.

The following day, Mr Chebbo received a call from the managing director informing Mr Chebbo that he had to dismiss him. Mr Chebbo alleged this was because as the CFMMEU threatened the company that they would lose work if the director did not do so. The grounds for dismissal stated that attending the illegal protest amounted to serious misconduct, contravening the government’s stay-at-home orders, and therefore brought the company into disrepute.

Among other things, Mr Chebbo argued that the dismissal was unfair as he was within his rights to attend the protest, and that any contravention of the stay-at-home orders were not work-related but a matter between himself and the authorities.

The Commissions’ findings regarding Mr Chebbo’s conduct

The Commission rejected many of Mr Chebbo’s factual allegations on the basis of implausibility or inconsistency, including his time of arrival, the allegations that the managing director encouraged him to attend the protest, and his statement that attending the protest was out of curiosity of what actions the union would be taking, not because he supported it. They also did not accept that the union applied direct pressure on the company for Mr Chebbo to be dismissed, but that the managing director understood based on his experience in the industry that the union would not look favourably on the continued employment of protesting employees.

In relation to Mr Chebbo’s conduct bringing the company into disrepute, the Commission considered the following items as important:

• Mr Chebbo attended the protest during work hours (and as such on the company’s time), which an observer could interpret as the company endorsing his protest. This affects the potential for reputational damage to the company, in terms of its relationships with clients, unions, and the government;
• Among the company’s clients was the Victorian government;
• Mr Chebbo did not just attend a protest in relation to the stay-at-home orders, he attended a protest that was related to his work;
• Even though Mr Chebbo did not wear clothing that bore the name of the company, he was nevertheless identifiable by some people as an employee of the company simply because he was known to them; and
• As such, the reputational risk Mr Chebbo posed to the company was a valid reason for dismissal, even if there were other reasons such as potential backlash from the union if the company did not terminate the employee.

The Commission’s findings regarding the dismissal itself and the reasons cited

However, despite the finding that Mr Chebbo’s conduct risked the company’s reputation, the Commission noted that no irreparable damage had been caused, and no loss was incurred.  The Commission also noted other difficulties with the process of the dismissal itself, being that:

• the explanation for the dismissal in the phone call was not sufficient, as Mr Chebbo was simply told that he should not have attended the protest, and he had made the relationship with the union worse; and
• Mr Chebbo was not provided an opportunity to fully respond to the reasons for dismissal.

The Commission therefore found that, on the basis that Mr Chebbo conduct did not constitute serious misconduct and the lack of procedure followed, the immediate dismissal was disproportionate to his actions.

Generally, serious misconduct is:

1. a breach of an essential term of the employment contract;
2. serious breach of a non-essential term;
3. conduct demonstrating intention to not be bound by the contract in future.; or
4. Conduct that causes serious or imminent risk to the health and safety of a person of the reputation, viability or profitability of the employer’s business.

The Commission found that whilst the protest was a serious matter, it does not constitute serious misconduct. Even though Mr Chebbo’s conduct was deliberate, Mr Chebbo did not consider or “think through” the consequences of his actions, and as such, he had failed to follow his duty to act in the best interests of the company (as opposed to breaching a clear company policy prohibiting certain conduct).

The Commission held that Mr Chebbo’s conduct was grounds for dismissal with notice, but not immediate dismissal, as carried out by the employer. Mr Chebbo was therefore awarded with 4 weeks’ pay, as this is the amount he would have received if he was terminated with notice.

Takeaways and action items for employers

This case highlights the importance, and in fact the requirement, for employers to seriously consider an appropriate disciplinary action against employees, particularly when alleging serious misconduct.

This case reminds employers to consider whether the conduct that has brought the disciplinary action truly falls within the scope of the definition of “serious misconduct” (thereby warranting a summary dismissal), and whether the conduct of the employee was deliberate. Failure by employers to do so may result in unnecessary expenditure of legal fees, plus the notice period that ought to have been originally granted to the employee, plus any further compensation awarded to an employee.

Finally, this case also serves as a reminder for employers to consider incorporating a company policy that clearly stipulates the expected conduct of employees, particularly in relation to rallies and protests.

If you have any concerns about your rights to terminate employees or any other employment matter, please do not hesitate to contact our friendly employment team today.