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When is it permissible to dismiss employees that persistently engage in bad behaviour? The answer to that question depends on the type of bad behaviour in question. Unfortunately, there is no hard and fast rule, the answer being largely context specific. Some actions may be considered to be serious while others will fall short of the threshold. Below are two cases which illustrate the variety of conduct that may or may not amount to serious misconduct warranting dismissal.

Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20


In this case, Sautner was a director of Melbourne Stadiums Ltd. He was summarily dismissed for alleged serious misconduct. The substance of the misconduct included:

  • Sautner using stadium tickets as a form of cash to obtain goods and services for personal benefits (bartering misconduct);
  • The making of a disparaging comment about the Chief Executive Officer of the company;
  • A failure to follow a direction issued by his superior; and
  • Repeated breaches of the company’s ticketing policy.

Applicable Law

In determining whether Sauntner’s actions amounted to serious and wilful misconduct the Court held that:

  • The employee’s breach of his or her employment agreement must be of a serious nature (not necessarily exceptional) before an employer may terminate the contract summarily.
  • In looking at a persistent course of conduct, it is wrong to assess whether a course of conduct warrants dismissal because it is repeated/persistent. Rather, what is relevant is the effect that the course of conduct has on the relationship between the employer and employee. The relationship is what is crucial.
  • In assessing whether disparaging comments amount to serious misconduct justifying dismissal, the following were all relevant considerations:
    • The context in which the comments were made (public and/or private);
    • The nature of the comment; and
    • To whom the comment was conveyed.


The Court held that Sautner’s disparagement of his superior amounted to serious misconduct as was his persistent breach of the company’s ticketing policy. Accordingly, his dismissal was found to be lawful.

McDonald v Parnell Laboratories (Aust) Pty Ltd [2007] FCA 1903


On the facts of this case, Ms McDonald was employed as a Quality Manager (a senior position in the company). During the course of her employment, she frequently left work early, took long lunches and sometimes drove her children to school before work. She was asked to provide her employer with an attendance schedule. Allegations were raised that Ms McDonald was dishonest in answering questions under the attendance schedule. Her employment was summarily terminated on the basis that she engaged in a course of serious, willful and persistent misconduct. Ms McDonald brought proceedings before the Federal Court of Australia claiming that her termination was unfair.

Applicable Legal Principles

In determining whether Ms McDonald’s actions amounted to serious and wilful misconduct, the Court held that:

  • An employee’s act or omission which constitutes the breach may amount to misconduct, disobedience, incompetence or negligence. For example, conduct which affects an employee’s performance of his or her obligations, or destroys confidence in the employer and employee relationship.
  • The terms serious and wilful misconduct are often the subject of judicial and administrative attention as applied to the facts of particular cases. However, there is little judicial discussion about their content and meaning. Accordingly, the words are to be given their ordinary or natural meaning.
  • The seriousness of conduct is judged on an objective level while wilfulness emphasises subjectivity. Wilful misconduct involves merely the doing of an act amounting to misconduct intentionally, with knowledge that the act will amount to misconduct.

In determining whether Ms McDonald’s actions amount to a persistent course of conduct, the Court held that persistent means conduct which occurs on more than one occasion.


Ms McDonald was found to have engaged in misconduct when she gave false answers under her attendance schedule. It was held that her conduct was serious and willful but not persistent because it occurred on a single occasion. Her general tardiness was not put forward as a reason for dismissing her.


If you would like to know more about the circumstances warranting the dismissal of an employee or have any questions, get in touch with our employment lawyers on 1300 544 755.


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