Can you dismiss an employee by phone, SMS or email?

In a society where the use of technology including mobile telephones and computers has become so prevalent, it is no surprise that electronic devices are changing the way in which we communicate. There has been a growing trend where employees and employers now communicate almost exclusively via email or text message. As such, it is not unexpected that there are a number of employers who have terminated the employment of their staff by phone, text or email in order to avoid those hard to have conversations with their employees.

Even though terminating an employee’s employment by one of these electronic means is not unlawful, it may be considered procedurally unfair and provide an employee grounds to challenge the dismissal. In this week’s article we consider whether terminating an employee’s employment by phone, text or email will leave an employer vulnerable to an unfair dismissal claim and the Fair Work Commission’s current stance on the issue.

The Fair Work Act 2009 (Cth)

Section 285 of the Fair Work Act 2009 (Cth) (“FWA”) sets out that a dismissal will be considered unfair if:

• The person has been dismissed; and
• The dismissal was harsh, unjust or unreasonable; and
• The dismissal was not consistent with the Small Business Fair Dismissal Code; and
• The dismissal was not a case of genuine redundancy.

Section 387 of the FWA provides several factors which the Fair Work Commission (“FWC”) may consider in determining whether a dismissal was harsh, unjust or unreasonable. These factors include:

• Whether there was a valid reason for the dismissal;
• Whether the person was notified of that reason;
• Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
• Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relation to the dismissal;
• If the dismissal related to unsatisfactory performance by the person, whether the person had been warned about that satisfactory performance before the dismissal
• The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
• The degree to which the absence of dedicated human resources or expertise in the enterprise would be likely to impact on the procedures followed in effect the dismissal; and
• Any other matter that the FWC considers relevant.

In our personal experience, we have been involved in a significant number of matters before the FWC where there may be a completely valid and justifiable reason for the dismissal, but the employer fails to undertake a proper termination process, resulting in the dismissal being found to be harsh, unjust or unreasonable. To that end, we note that there can be some real risk for employers when terminating an employee other than by a face-to-face meeting and we have undeniably noticed a steady increase in cases before the FWC where unfair dismissal claims have been upheld because of some procedural defect in the termination process.

Recent Case Law

Most recently, in the decision of Anita Cachia v Scobel Pty Ltd ATF the S & I Trust t/a Emerse Skin & Laser [2018] FWC 2648, Deputy President Sams of the FWC specifically considered an unfair dismissal application where the employee was terminated for serious misconduct by telephone.

In this matter, the employer dismissed Ms Cachia, a beauty therapist, for her ongoing inappropriate behaviour and poor treatment towards the company’s manager and other staff. In one instance, it was noted that she pushed the company’s manager out of a door way and slammed a sliding door in her face. It was alleged Ms Cachia also had a constant disregard for authority and there were a number of allegations made by other staff in relation to her poor treatment towards them.

In the circumstances, the employer conducted an investigation and asked staff to provide statements. The employer then met with the Ms Cachia and her mother (as a support person) to discuss the allegations and give her an opportunity to respond. Following the meeting, the employer deciding to terminate Ms Cachia’s employment for gross misconduct. As it was a small business it applied the Small Business Fair Dismissal. The termination was carried out by telephone and the employer paid all outstanding entitlements owed to Ms Cachia.

In handing down his decision, Deputy President Sams found Ms Cachia’s conduct did constitute serious misconduct and agreed that she posed a threat to the health and safety of other employees which left the employer with no other choice but to terminate her employment. The Deputy President also found that the employer complied with the Small Business Fair Dismissal Code and Ms Cachia was not denied procedural fairness.

However, His Honour did criticise the manner taken by the employer to inform Ms Cachia of her dismissal by phone. Specifically, DP Sams stated, “I do not consider that informing an employee of their dismissal by phone, text or email, to be an appropriate means of conveying a decision which has such serious ramifications for an employee”. 

In this regard, Deputy President Sams considered the fact that there had already been one meeting with Ms Cachia and he could not see any reason as to why a further meeting could not have been organised to explain the company’s decision and discuss the termination. However, he did accept that the Small Business Fair Dismissal Code did not include a requirement to convey the decision to terminate an employee in person. He also made note of the fact the employer had no human resource or industrial relations expertise and had solely relied on the Fair Work Commission’s website and the terms of the Small Business Fair Dismissal Code. In concluding, Deputy President Sams referred to the fair go all round principle within the FWA and upheld the dismissal.

Lastly but notably, within Deputy President Sams’ decision he also referred to and agreed with the recent decision of Commissioner Cambridge in Knutson v Chesson Pty Ltd t/a Pay Per Click [2018] FWC 2080 at [47] where it was held that notification of dismissal should be conveyed face to face unless there is some genuine apprehension of physical violence or geographical impediment. Furthermore, Commissioner Cambridge stated, “Even in circumstances where email or electronic communications are ordinarily used, the advice of termination of employment is a matter of such significance that basic human dignity requires that dismissal be conveyed personally with arrangements for the presence of a support person and documentary confirmation”. 

It is noteworthy that Commissioner Cambridge in this decision found the dismissal of an employee by email to be unnecessarily callous and the employer in this matter carried out the dismissal with significant procedural flaws. As a result, Commissioner Cambridge found that the dismissal in this specific matter to be unfair and awarded the employee $22,880 in compensation to cover 17 weeks of lost pay between her dismissal and the commencement of her new employment.

Lessons for Employers

From the decisions above, it is clearly apparent that if an employer chooses to terminate an employee by electronic communication they do run the real risk of the FWC concluding that procedural fairness was not afforded to the employee. Furthermore, it is evident that undertaking a dismissal by phone, text or email will likely reflect negatively on the employer and enhance scrutiny by the FWC on the process the employer took (or failed to take) when dismissing an employee.

Unless there is a real risk of physical violence or some geographical hindrance to holding a meeting in person, it is our recommendation that employers avoid using electronic means to discuss serious employment matters such as disciplinary issues, performance issues, termination, resignation or offers of employment. To minimise the risk of a successful unfair dismissal claim, employers must adopt the more traditional way of communicating –  a face to face meeting, confirming the decision in writing.

It is imperative to remember to ensure any process in relation to termination of employment or performance management should be procedurally fair and provides the employee with an opportunity to respond and/or raise issues or concerns. In any event, regardless of what an employee may have done, unless it is unsafe to do so, or entirely impracticable, there is no excuse for an employer to convey a decision regarding an employees’ employment via electronic means.

If any further information in relation to any aspect of this alert is required or if you need assistance in relation to a termination issue or ensuring compliance with the increased national minimum wages, please do not hesitate to contact our office.

This alert is not intended to constitute, and should not be treated as, legal advice.