The Fair Work Act 2009 (Cth) (‘FWA’) and the Small Business Fair Dismissal Code will likely consider workplace theft serious misconduct, allowing the employer to summarily dismiss the employee (that is, without notice). Even if this were the case, the law still requires the employer to comply with procedural fairness. This article will explore the application of unfair dismissal laws for both small and other sized businesses and what employers should do in the case they are subject to workplace theft.

Unfair Dismissal Under the Small Business Fair Dismissal Code

The Small Business Fair Dismissal Code applies to small businesses. Under section 23 of the FWA, a small business is one that employs fewer than 15 employees. This count does not include casual employees unless you used them regularly and systematically.

Dismissal laws are slightly different if the Small Business Fair Dismissal Code applies to your business. If the Fair Work Commission were to assess a dismissal claim, they would consider whether you met the test under the Small Business Fair Dismissal Code.

The test is that a small business employer may summarily dismiss an employee when:

  1. They have reasonable grounds to believe the conduct is sufficiently serious; and
  2. They have reasonable grounds to believe that the conduct is serious enough to justify immediate dismissal.

This test means that the employer would have to justify why the serious offence of workplace theft warrants immediate dismissal. For example, this might be that the employee has completely broken the employer’s trust, or there is a safety or criminal matter involved.

Unfair Dismissal Under the Fair Work Act 2009 (Cth)

The test for unfair dismissal for other business employers differs to the one above. Section 387 of the FWA sets out numerous factors which the Fair Work Commission will consider to determine whether the dismissal was harsh, unjust or unreasonable. The factors relevant to workplace theft, include:

  • Whether there was a valid reason;
  • Whether you notified the employee;
  • Whether the employee was given the opportunity to respond;
  • Whether the employee was allowed a support person during discussions; and
  • The effect the dismissal will have on your business.

In proving you had a valid reason, you will need proof that the conduct occurred.

Unfair Dismissal in Narwal v Aldi Foods Pty Ltd

In Narwal v Aldi Foods Pty Ltd [2012] FWA 2056 (‘Narwal‘), the employer did not conduct the appropriate investigations into the employee’s conduct. Even though the Commission considered the employee’s actions to be serious misconduct, the dismissal was still considered “harsh, unjust and unreasonable” because of the way the employer handled it.

In this case, the employee failed to pay for groceries and asked to pay at a later time. He subsequently forgot to pay for the groceries. Rather than raise the issue with him and discuss the situation, the employers did not raise it with him until a couple of days later when they summarily dismissed him.

The Commission was critical of the way in which employer handled the situation and that by letting the employee continue to work without discussing the matter, the employer was condoning the behaviour.

What Should You Do If Your Employee is Involved in Workplace Theft?

If you are not a small business, ensure that you consider the factors in section 387 of the FWA and have evidence that the conduct occurred. The finding of Narwal highlights the need to carry out proper investigations and not delay in dismissing the employee to ensure that your summary dismissal is not considered harsh, unjust or unreasonable.

Where you are a small business, you simply need to ensure you have sufficient evidence to discuss the issues with the employee.


Are you an employer and have any further questions about workplace theft? Our employment lawyers are happy to help. We can provide you with a clear set of steps to follow to ensure your compliance with either the FWA or Small Business Fair Dismissal Code. Call us on 1300 544 755.

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