At some stage as an employer, you may need to terminate an employee due to their behaviour outside of work based on a criminal conviction. It’s a very different situation where the employee undertakes criminal or serious misconduct in the workplace as opposed to outside the workplace. It is important to be aware of whether you are taking the correct legal steps when undertaking this process.

Termination and Procedural Fairness

You must follow steps concerning procedural fairness when terminating any employee. You should also importantly consider the nature of the role and whether the criminal conviction affects the employee’s ability to undertake their role. For example, if your employee requires their driver’s licence to perform their role and are convicted of drink driving and lose their licence then you may be able to terminate their employment. If your employee is convicted of a crime, it does not provide a blank cheque to summarily terminate the employee’s employment, especially when the criminal activity happens outside of work hours.

You need to consider some different factors before terminating your employee for their behaviour outside of work hours. If you have concerns about your employee’s criminal conviction, then you should consult an employment lawyer before terminating their position. Concerning the termination process, you should consider whether you are a small business or not as that will impact whether you should follow the procedure of the Small Business Fair Dismissal Code or the Fair Work Act 2009 (Cth).

Deeth v Milly Hill

An extreme recent example is the case of Deeth v Milly Hill Pty Ltd [2015] FWC 6422, where an employee was charged with accessory after the fact to murder. The FWC considered whether it was allowable to summarily, or automatically, dismiss the employee in the circumstances of the case. Upon reviewing the circumstances, the FWC held that there were not sufficient reasons for summary dismissal as proper investigations were not made and Mr Deeth’s actions did not correspond to “serious misconduct” as set out by the Small Business Fair Dismissal Code, which was applicable. The FWC held that the dismissal had been harsh and unjust but not unreasonable. FWC held that Mr Deeth was not afforded procedural fairness as required under the Small Business Fair Dismissal Code.

Another important factor that the FWC will consider is the connection between the conviction and the work that the employee does. For example, a criminal conviction of drug possession or drink driving may have little to do with the day to day performance of the employee’s obligations. However, a conviction relating to dishonesty, a conviction which affects their ability to do their work or their suitability for their position may make the termination reasonable.

In Hospital Employees’ Federation of Australia v Western Hospital (1991) 4 VR 310 at 324, and approved by Staindl JR in Hussein v Westpac Banking Corporation (1995) 59 IR 103 the test for relevance was established. When assessing the relevance of the criminal conviction or misbehaviour, one should consider whether the employee breached their employment contract and determined relevance on a case by case basis.

A court will take into account certain factors, and these will be affected by the nature of the business, the role of the employee as well as the circumstances of the criminal conviction. Some of the factors you need to consider include:

  • The nature and severity of the offence, for example, violence or criminal charges involving children.
  • If the worker’s role involves a high level of trust or trust is inherent to the role such as an accountant or lawyer dealing with trust funds, does the conviction relate to trust in their role?
  • Does the conviction impact on the employee’s duties to undertake their role for example, do they require a licence, a working with children check or other certification that will be effected by the conviction? In some situations, it may be illegal for them to continue in a particular role with that conviction.
  • The impact of the conviction on the reputation and profitably of your business (for example in Deeth v Milly Hill Pty Ltd the FWC did agree that the conviction may impact the business as it was a small town)

If your employee is convicted of a crime and sent to jail, then you will also need to consider procedural fairness if you decide to terminate them for this conviction. Generally speaking, if the employee is unable to perform their duties because they are not physically able to attend their place of work, then this may be a valid reason for terminating employment. However, you would still need to follow proper procedure for termination. If the employee only has a short stint in jail and requests leave, then this might not necessarily give you the right to terminate the employment automatically.


It is not likely that an employer would be held to have undertaken discriminatory action against an employee where they cannot undertake the inherent requirements of their job. Where the employee’s conviction has nothing to do with their job, then employees should be wary of discrimination based on this and previous convictions. The employer may be in breach of discrimination laws if they discriminate against an employee based on previous convictions. Discrimination in employment is prohibited by the International Labour Organisation Convention 111 (ILO 111) and enforced by the Australian Human Rights Commission.

Key Takeaways

Employers need to be aware that an employee’s criminal conviction does not provide an automatic right to terminate their employment. You may also need to consider the employee’s role for example if they are a director you may have separate relevant terms in their contract about how criminal convictions may affect the holding of this position. You should also be wary of taking steps were no conviction had been proved, to ensure fairness. Of course, if your employee does undertake a serious criminal activity at your workplace then there may be sufficient reason to summarily dismiss the employee.

If you have any questions or concerns about terminating your employee’s employment as a result of a criminal conviction, you should consult an employment lawyer, and they will be able to provide you with guidance as to the best approach.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Edith Moss

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