Three Strikes Means Three, not Two

Dafallah v Fair Work Commission [2014] FCA 328 (4 April 2014)

When a company wrote to an employee outlining two issues of concern, it subsequently treated those as a first and second warning, thereby, according to the Federal Court, falling into error.  The company had identified a number of problems with the employee’s performance, and ultimately dismissed her after the ‘third’ warning.

But the amalgamation of the first two issues into one letter was the company’s downfall as far as the court was concerned. The court identified the proper process had been written unambiguously into the enterprise agreement and the employee was not afforded the correct application of the agreement’s terms.

In particular, the judge was critical of the company’s behaviour on the basis that it restricted the employee’s opportunity to do something about her performance. The court held that if the proper process had been adopted, that is, a staged disciplinary process, there would have been opportunity and time for the employee to react to the first warning, then a second and so on.

Understandably the court was also critical of an employer who failed to follow its own enterprise agreement’s terms. The company was ordered to compensate the employee to the tune of $15,500 for the breach of the agreement and this stood instead of a civil penalty.

This case demonstrates that although an employee may be validly dismissed, the process adopted has to be fair and in accordance with previously agreed and binding terms. It mattered little in this case that the employer was justified in dismissing the employee – what mattered was the agreed steps had not been followed and that in itself rendered the result compensable. Employers must either not include detailed processes in enterprise agreements or they abide by those they do include to avoid similar treatment as this company received.