Case review: Why employers and investigators should think twice before characterising workplace misconduct as criminal in nature

DG v Coogee Legion Ex-Service Club Ltd [2023] FWC 2785

Imagine this….

An employer catches wind of a significant amount of missing alcohol following a stocktake audit at their premises. The workplace policies provide that all drinks, food and services provided to members, customers, team members, contractors and other officers are to be paid for and accounted for in the correct manner, and that any breach of the policy is considered as theft, must be investigated and may result in termination. The employer suspends the staff involved and commences a workplace investigation. You are assigned as the investigator.

CCTV footage recorded during a recent work social event shows that one employee consumed one drink which was not paid for. You issue allegations against the relevant employee, alleging “theft and fraud” (in relation to the one drink that was not paid for).

Adverse findings are made by the employer in respect of the staff member’s dishonesty, based on CCTV footage that has not been provided to the staff member and in circumstances where evidence to the contrary has been withheld from the staff member. The employer terminates the staff member for ‘receiving stolen goods and/or theft’ and prohibits the staff member from gathering their own evidence.

The case…

The facts outlined above are a broad representation of the facts underpinning a recent unfair dismissal case, where the Commission was tasked with determining whether the dismissal of the Applicant was harsh, unjust or unreasonable pursuant to section 387 of the Fair Work Act.

Commissioner Deputy President Wright found that while the employer was within their rights to investigate the alleged ‘fraudulent’ conduct, the employer’s use of the wording ‘fraud’ and ‘theft’ in relation to the Applicant were intimidatory and unconscionable, in that the words conveyed that the Applicant had engaged in criminal conduct in circumstances where:

• there was no evidence of any intentional behaviour (in fact, there was evidence to the contrary);
• the alleged criminal conduct had not been established ‘beyond reasonable doubt’; and
• there was evidence which the CEO of the employer company deliberately withheld from the Applicant. It was also found that there were procedural injustices that manifested throughout the process, including the failure to show the employee certain evidence that was relevant to their ‘intent’ and the adverse findings made against the Applicant.

Ultimately, the Court held that the dismissal of the Applicant was harsh, unjust or unreasonable, including because of the employer’s ‘baseless conclusions’ about the criminality of the Applicant’s conduct. By way of remedy, the Court ordered that compensation be paid to the Applicant.

This case serves as an important reminder to both employers and investigators:

1. Workplace investigations are not criminal investigations.
2. Be careful when using terminology to describe conduct that could be considered criminal, such as theft, fraud or assault, as those terms also have specific legal definitions in criminal law.
3. The language of the alleged misconduct should focus on policy violations.
4. In circumstances where the policy uses terminology that could be considered criminal conduct, such as theft, consider describing the alleged conduct as a policy violation. For example, ‘such conduct may be considered theft under the Company XYZ Policy’ (therefore, distinguishing it from the criminal definition of theft).?

This post was written by Courtney D. , Workplace Investigator with Q Workplace Solutions