Serious Misconduct in the Workplace – the Importance of Process

An employee dismissed after 23 years of service for speeding detected by a motorcycle tracking device. Another employee found to have been unfairly dismissed despite sharing pornographic material at work. Understanding key principles and the importance of process when dealing with serious misconduct in the workplace can make a big difference to the outcome of an unfair dismissal claim.

What Counts as Serious Misconduct?

The Fair Work Regulations define “serious misconduct” to include wilful and deliberate behaviour by an employee that is inconsistent with the continuation of the employment contract and which causes serious and imminent risk to the health and safety of a person or the reputation, viability or profitability of the employer’s business.

Examples include:

• Theft
• Fraud
• Assault
• Sexual harassment
• Intoxication at work
• Refusing to carry out a lawful and reasonable direction

If an employee has engaged in serious misconduct, their employment can be immediately terminated without notice. However, getting it wrong can open the door to an unfair dismissal claim, particularly where the alleged conduct is not sufficiently serious to warrant immediate dismissal.

The Fair Work Commission does not apply a fixed checklist. Instead, it assesses each situation on its own facts, weighing the nature of the conduct, the employee’s role and seniority, applicable workplace policies and whether the employer followed a fair process. This case-by-case approach means the threshold is not static. Relying on a rigid contractual definition of misconduct, or assuming a particular behaviour will automatically justify summary dismissal, is a risky approach.

The Impact of Technology on Detecting Serious Misconduct

While the legal test for serious misconduct has not changed materially; what has changed is the range of conduct employers can now detect and prove. Electronic tracking devices, telemetric monitoring and communications surveillance have expanded the range of conduct that can be detected and substantiated. Behaviours that may have previously been invisible to employers, such as speeding in a work vehicle, idle time during work hours and inappropriate electronic communications, can now be detected more readily.

A recent Fair Work Commission decision illustrates this.

In Jackie Du v Australian Postal Corporation [2026] FWC 1134, a long-serving postal worker was dismissed after telemetric devices attached to delivery motorcycles revealed a pattern of speeding, including riding at 22 km/h on footpaths (over twice the speed limit), and what the Commission characterised as “wilful idleness”, evidenced by gaps of 20 to 54 minutes between delivery scans during work hours.

Despite 23 years of service, the Commission found the dismissal was justified. The tracking evidence was compelling, the conduct was deliberate, and the employer had followed a proper process.

Procedural Fairness: Why Process Matters

While technology might enable detection, it does not eliminate procedural obligations. Employers must distinguish between what they can now detect and what they can lawfully act upon. Before moving to dismissal, employers still need to put the evidence to the employee, allow a genuine response, and consider the full circumstances. Skipping those steps, even with clear electronic evidence in hand, can turn a defensible dismissal into a costly claim.

In Mr Daniel Thomas v Bin Boy Environmental Pty Ltd [2026] FWC 917, an employee was dismissed after sharing pornographic material at work and making inappropriate comments via a workplace messaging application. The conduct was serious, and the Commission accepted it constituted a valid reason for disciplinary action. Yet the Commission found the dismissal unfair, because the employer had not provided adequate warning and had not given the employee a genuine opportunity to respond to the allegations before the decision was made. Commissioner Tran was critical of the employer’s “relaxed approach to procedural fairness”.

Procedural requirements are non-negotiable. Employers should conduct a fair and impartial investigation, provide the employee with written notice of the specific allegations, and allow a genuine opportunity to respond. That opportunity must be meaningful. In some circumstances, a written response alone may not be sufficient. Employees may be entitled to a meeting or hearing where they can explain their conduct in person, particularly where the allegations are complex or the consequences severe.

Documentation matters too. Every step in the disciplinary process should be recorded. If a decision is later challenged before the Commission, the employer will need to demonstrate not just what the employee did, but how the employer responded.

Out-of-Hours Conduct: When Personal Behaviour Becomes Workplace Misconduct

The boundaries between work and personal life have blurred considerably, particularly with the rise of remote work, social media, and digital communication. Out-of-hours conduct may constitute serious misconduct where it causes serious damage to the employer-employee relationship, damages the employer’s interests, or is incompatible with the employee’s duties.

As established in Rose v Telstra Corporation Ltd [1998] AIRC 1592, the leading authority on this principle, out-of-hours conduct will only justify dismissal if it meets this threshold: the conduct, viewed objectively, must be “of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee”. The conduct must have a real and demonstrable connection to the employment relationship not merely reflect personal choices the employer finds distasteful.

Reputation-sensitive industries like media, education, and public-facing roles face scrutiny of personal conduct, but the Commission and courts have been equally willing to find in the employee’s favour where the connection to the employer’s interests is not made out, or where the employer’s own process was deficient. Employers should also be alert that dismissals connected to public controversy can raise a separate legal risk beyond unfair dismissal: if the conduct in question touches on a protected attribute, such as an employee’s political opinion, a termination decision may expose the employer to a general protections claim under the Fair Work Act, which carries its own, distinct evidentiary and procedural requirements.

Critically, employers cannot simply assert that out-of-hours conduct has damaged their reputation. They must provide actual evidence of that damage. Vague claims about reputational harm, without supporting material, are unlikely to satisfy the Commission.

Practical Steps for Employers

Getting disciplinary decisions right requires preparation long before any incident occurs. A few practical measures can significantly reduce exposure.

• Review and update workplace policies regularly. Policies should reflect contemporary workplace challenges, including electronic communications standards, remote work expectations, and the use of monitoring technologies. Outdated policies can create gaps that employees and their representatives may exploit.

• Set clear behavioural expectations. Employment contracts and workplace policies should articulate standards for conduct, including out-of-hours behaviour where it is genuinely relevant to the role or industry. Employees cannot be expected to meet standards they were never told about.

• Conduct fair, independent investigations. Do not rely solely on third-party reports or surveillance data without verification. Investigate thoroughly and approach the process without a predetermined outcome.

• Provide written notice and a genuine opportunity to respond. Put the specific allegations in writing. Allow the employee time to consider them and respond, including through a meeting if they request one.

• Ensure proportionality and consistency. Disciplinary outcomes should be consistent and proportionate to the conduct.

• Document everything. Records of investigations, meetings, notices, and decisions are your evidence if the matter proceeds to a hearing.

Conclusion

Serious misconduct in the workplace is a moving target, shaped by technology, changing workplace culture, and an evolving body of case law. Employers who understand this, and who invest in sound policies and fair processes, are far better placed to make defensible disciplinary decisions.

This article provides general information only and does not constitute legal advice. If you are facing a disciplinary matter or want to review your workplace policies, speaking with a qualified employment lawyer is advisable before acting.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.