Employers should think carefully before making a decision to immediately or “summarily” dismiss an employee. For summary dismissal to be lawful, there must have been a breach by the employee of either an express or implied term of the contract of employment that is serious enough to necessitate an employer to undertake an action of summary dismissal.
In Bruce v AWB Ltd  FCA, the Federal Court of Australia stated that mere misconduct is not considered as sufficient grounds to warrant immediate dismissal. For a summary dismissal to be lawful, the employee’s conduct must be judged serious enough that summary dismissal is the only option. In Concut Pty Ltd v Worrell  HCA 64, Kirby J stated that it is “only in exceptional circumstances” that an employer is entitled to dismiss an employee summarily. His honour went on to state that generally, acts of dishonesty of similar conduct that destroys the mutual trust between the employer and employee fall within the class of conduct which would allow a lawful summary dismissal.
In a recent case in the Fair Work Commission (FWC), Smith v Aussie Waste Management Pty Ltd  FWC 1044 (Smith), the FWC ruled that swearing at a managing director during a heated phone call was not sufficient cause for summary dismissal. The FWC ruled that the conduct was not ‘sufficiently insubordinate’ for him to be dismissed because the conversation was not overheard by other employees, meaning it had not undermined the managing director’s authority in the workplace.
The employee originally sought reinstatement, however is now seeking compensation instead of reinstatement on the basis that he has found employment elsewhere. The FWC is yet to rule on the award of compensation to the employee.
In the case of misconduct in your workplace, you should seek advice before dismissing an employee to avoid exposure to a claim for unfair dismissal or possibly adverse action.