Gross Misconduct

Ordinary misconduct is dealt with by warnings and, if it continues, eventually by dismissal on notice. Gross misconduct is the category for conduct so serious that continuing the employment relationship is untenable, allowing the employer to end it without notice.

What the label changes is narrow. It removes the notice period. It does not remove the need to establish that the conduct occurred, to put it to the employee, to hear their answer, or to record why the decision was reached.

That distinction is the one employers most often collapse. Treating the seriousness of an allegation as a reason to move quickly through the process is precisely backwards: the more serious the allegation and the more severe the sanction, the more carefully the process has to be run.

Typical categories include theft and dishonesty, violence or threats, serious breaches of safety rules, serious breaches of confidence, deliberate damage, being unfit for work through intoxication where safety is involved, and falsification of records.

Two cautions apply to any such list.

First, listing conduct in a handbook does not make it gross misconduct. The question is whether the conduct in the actual circumstances was serious enough to justify summary dismissal, and a list is a statement of expectation rather than a conclusion. An employer that dismisses summarily for something on its list, where the circumstances do not bear it, has not been protected by the list.

Second, the omission of conduct from a list does not prevent it being gross misconduct. Lists are illustrative and should say so.

Where standing orders apply under section 28 of the Industrial Relations Code, the conduct attracting summary action may be defined there, and those definitions govern for the matters they cover.

The third row is the one that produces claims. Where an employer characterises conduct as gross misconduct principally to avoid a notice payment, and the characterisation does not survive examination, the saving is lost along with a good deal else.

A dismissal for gross misconduct does not cancel amounts already earned. Wages for work done, and entitlements that have accrued, remain payable, and the payment obligation on separation is a short one.

Statutory disqualifications, where they exist, are specific and narrow rather than general. Under section 29 of the Code on Wages, 2019, an employee is disqualified from receiving bonus where they are dismissed from service for fraud, for riotous or violent behaviour while on the premises, or for theft, misappropriation or sabotage of any property. That is a defined list tied to dismissal for those causes, not a general consequence of serious misconduct.

So an employee dismissed for a serious safety breach may well have committed gross misconduct and still not fall within the bonus disqualification, because the ground is not on the list. Treating the two as the same is an error that produces an underpayment.

Under section 17(2) of the Code on Wages, wages payable on dismissal must be paid within two working days, and the manner of the dismissal does not extend that deadline.

• Suspend only where there is a reason, such as risk to evidence, people or the business, and say the suspension is not a sanction.
• Investigate at the pace the allegation requires rather than at the pace the anger suggests.
• Put the specific allegation, with the evidence, and allow time to respond.
• Consider the employee's answer genuinely, including mitigation and length of service.
• Record the reasoning, particularly why the conduct was treated as gross rather than ordinary misconduct.
• Pay what is owed on time, whatever the circumstances of the exit.

The fifth is the one most often missing. A file that records the conduct and the dismissal, but never explains why the conduct crossed into the summary category, leaves the central question unanswered by the only people who could have answered it at the time.