Bungled dismissal for free drink costs NSW Club thousands

The Fair Work Commission has lambasted an employer for dismissing a young casual employee over “baseless” accusations she had engaged in criminal activity, recently awarding the sacked Duty Manager over $20,000 in compensation, having determined in October that her termination was unfair.

The Duty Manager had nearly 18 months’ service with the small Club in Coogee when she was dismissed for “theft and dishonesty” on 5 May, attributed to her being captured on CCTV failing to pay for an alcoholic beverage she received after attending a staff meeting on 18 April. The employer also argued it was later established the Duty Manager had been drinking before the staff meeting, which it claimed breached its prohibition on staff consuming alcohol prior to a shift and constituted further grounds for dismissal. For her part, the Duty Manager conceded that she had failed to pay for the vodka drink and was apologetic for her actions in not realising this at the time – especially when the incident occurred immediately after a staff meeting in which “stock variances” had been discussed and all employees were “instructed that they must pay for all food and drink consumed” – but maintained the one-off incident had been entirely unintentional.

Deputy President Wright found the Duty Manager to be “honest and credible” in giving evidence before the Commission and noted the employer did not seek to advance that the employee demonstrated “any history of dishonesty or of other wrongdoing”, other than the incident that led directly to her dismissal. Despite the existence of CCTV footage and the Duty Manager’s confession which confirmed she received a drink which was never paid for, Deputy President Wright remained unconvinced the behaviour was deliberate or warranted dismissal.

In accepting the Duty Manager’s actions were “unintentional”, the Deputy President distinguished between her conduct and that of three other staff members, who all received or dispensed multiple free drinks on the same day, but who showed “some preplanning” behind their actions. Deputy President Wright observed that the employer’s view of the Duty Manager’s behaviour on 18 April was “tainted by the actions of other employees”, who “were observed falsely ringing up drinks on the Club’s cash register without payment being received and pretending to use a phone to pay for drinks without payment being made on multiple occasions”. In contrast, the Deputy President concluded the Duty Manager had been genuinely confused as to whether she had already paid for the drink in question finding, “on the balance of probabilities that [the Duty Manager] did not deliberately take the free drink and that the alleged misconduct did not occur”.

Whilst also establishing the Duty Manager had several drinks before the staff meeting on 18 April (as did numerous other staff), Deputy President Wright determined the employer’s policy prohibiting drinking before shifts did not extend to encompass staff meetings. This distinction was made in part because employees attending staff meetings are not paid the minimum engagement for a shift – a practice the Deputy President openly doubted was compliant with the prevailing award – observing the Club treated staff meetings differently to rostered periods of work. As a result, Deputy President Wright assessed the Duty Manager “did not engage in misconduct when consuming alcohol prior to the staff meeting”.

Although accepting the Duty Manager should have been more “vigilant” when she failed to pay for the beverage on 18 April, the Deputy President suggested this infringement could have been satisfactorily dealt with by a “verbal warning”. In addition to concluding there was no valid reason for dismissal, Deputy President Wright was also highly critical of the termination process as well as the conduct of the employer’s representative during the Hearing.

Despite acknowledging the Club was a “relatively small business” (33 staff, comprised of 25 casuals), the Deputy President identified numerous elements of the termination process that she labelled “concerning”, including:

  • correspondence to the Duty Manager using language such as “theft” and “fraud” which the Deputy President assessed as being designed to be “intimidatory” and the same correspondence, more than once, referring to “multiple acts of wrongdoing” when only one drink was ever accepted by the Duty Manager without payment;
  • the employer having made adverse findings about the Duty Manager’s conduct before she had opportunity to view the CCTV footage and failing to show the Duty Manager the footage until she requested to see it late in the investigative process;
  • management withholding information from the Duty Manager that supported her account that her behaviour had been unintentional, specifically, confirmation from the employee who had provided her the ‘offending beverage’ who confirmed the Duty Manager had not requested or sought a free drink – Deputy President Wright labelled this the “most concerning aspect of the process”, branding it “both dishonest and a serious breach of procedural fairness”;
  • the employer forming the “unreasonable” view that the Duty Manager did not take accountability for her actions because she maintained her behaviour was unintentional and “refused to resign”.

The broad accusation of “criminal behaviour” (which the employer’s representative continued to pursue aggressively before the Commission) was derided by the Deputy President, who commented that it was “unconscionable for the Club to claim that [the Duty Manager] engaged in criminal behaviour in circumstances where [the Duty Manager] explained that her conduct was unintentional and there was evidence which corroborated this, including [her] prior favourable employment record and evidence which [management] deliberately withheld from [the Duty Manager]”. The Deputy President went on to observe:

“It was open to the Club to investigate [the Duty Manager’s] conduct on the basis that she breached the Club’s policies but instead the Club made baseless conclusions that [the Duty Manager] engaged in criminal conduct. This is in circumstances where [the Duty Manager] is studying nursing and such serious findings may have an adverse impact on her ability to commence a career in that profession”.

Having found the Duty Manager’s dismissal to be unfair, Deputy President Wright immediately discounted reinstatement as an appropriate remedy. In determining compensation, the Deputy President had regard to the “adverse impact” the dismissal had on the Duty Manager’s future employment prospects – the Club confirming it told at least one prospective local employer they would not re-employ her – and, after conducting a further Hearing, ultimately awarded $24,376.42 (gross), plus superannuation, falling just below the maximum award of six months’ wages as compensation.

Giblin v Coogee Legion Ex-Service Club Ltd [2023] FWC 2785 (24 October 2023)

Giblin v Coogee Legion Ex-Service Club Ltd [2023] FWC 3178 (1 December 2023)

Update

The employer was granted permission to appeal the decision on the basis that “the appeal raises an issue of general application in respect of dismissals involving allegations of conduct of a criminal nature” but a Full Bench of the FWC rejected all eight appeal grounds advanced by the Club.

An appeal in respect of the compensation order remains to be determined.

Coogee Legion Ex-Service Club Ltd v Giblin [2024] FWCFB 270 (29 May 2024)