Employer loses dismissal case due to misinterpretation of Fair Work regulations

A recent decision by the Fair Work Commission ruled that an employer, who had otherwise “acted quite benevolently” in accommodating the needs of a worker suffering from poor health, had to pay four weeks compensation — on top of what it had already paid in lieu of notice — for what was deemed to be an unreasonable and unnecessarily harsh dismissal.

The customer service officer, who worked for a small business, raised her employer’s concerns during her initial year at work when she used up an excessive amount of personal and other leave due to her own ill-health and her need to care for other family members inflicted with similar medical problems.

The employer agreed to accommodate her health needs, as well as her carer’s responsibilities, by agreeing to change her 9am-5pm work schedule to 8am-4pm. After five years of working under this arrangement, the employer legitimately sought to return her to the organisation’s standard hours that were more suited to its business operational requirements. However, the officer could not comply due to the nature of her carer responsibilities.

Consequently, the tension at work rapidly escalated. The employer’s scrutiny of the officer’s flexible, daily working arrangements and its insistence she return to normal hours lead to the officer suffering “a severe emotional event” and immediately left the workplace stating she could not stay at work anymore. Four and a half months later, the officer received a letter of dismissal from her employer.

While the officer did not return to work during this time, she did provide medical certificates to cover her period of absence. The employer erroneously believed and decided that since her absence exceeded three months, dismissing her would comply with Regulation 3.01(5) of the Fair Work Regulations.

The officer claimed that the employer breached the Small Business Fair Dismissal Code since they neither warned her about possible dismissal because of her extended absence, nor gave her a chance to respond. In particular, her representative’s suggestion for an independent mediation was not properly considered by the employer, which the Commissioner noted “may have resulted in an amicable arrangement” to finalise the officer’s employment on the true basis of her incapacity and include agreed terms.

The Commissioner’s decision stated that the employer could have established a valid reason for her dismissal with the current evidence of extended absence due to illness which made her genuinely incapable to return to work. Unfortunately, the officer’s dismissal was not based on her capacity or conduct, rather from the employer’s erroneous interpretation of Regulation 3.01(5), and believing that her absence of more than three months meant that it could “dispense with any fundamentally reasonable arrangements” in her dismissal.

iHR Australia’s range of workplace investigation services can help to ensure that internal workplace investigations are not only sound but able to stand up to external testing. Workplace investigations conducted by iHR are fair, impartial, prompt and thorough and our independent workplace investigators are focused and sensitive throughout the investigation process.  Our workplace mediation services are a confidential process, offering involved parties the opportunity to resolve disputes and stabilise working relationships in an effort to avoid costly and time-consuming litigation.