When is it appropriate and fair to dismissal an employee for theft?

The case of David Dawson v Qantas Airways Limited is an interesting examination of the law, and an example of the dangers of proceeding to arbitration of a matter.

Mr Dawson was a flight attendant with an unblemished record for Qantas for 28 years. He was 50 years old at the time of the arbitration.

After a domestic flight, a random search found he had removed Qantas property from the aircraft – namely a mini bottle of gin, two mini bottles of vodka, a can of beer, and a bottle of beer. The alcohol was concealed about his person or in his bag.

During the ensuing investigation, he attempted to mislead or deceive Qantas about how the alcohol came to be in his possession, in contravention of a clear written policy that no company property can be removed from an aircraft. In particular, he told the investigator that his wife had obtained the miniature bottle of gin at a hotel the day prior to the flight. When the investigator followed this up, it turned out the hotel didn’t sell miniature bottles of alcohol.

After a ‘show cause’ process, his employment was terminated for two reasons:

  • Stealing alcohol that was Qantas property; and
  • Attempting to deceive Qantas during the investigation.

Mr Dawson argued that termination was disproportionate to the offence under the circumstances. He also argued that another employee who had been found with Qantas chocolates during the same search had not had her employment terminated, and that the inconsistent treatment rendered his dismissal unfair.

The decision by the FWC in the first instance was that the dismissal was not unreasonable, because there had been a valid reason, and the theft had occurred. And the dismissal was not unjust because Qantas followed a fair process. However, the Commission found that the dismissal was harsh, based on the following factors:

  • His 28 years of unblemished service for Qantas as a long-haul flight attendant.
  • The small value of the items stolen.
  • The Applicant’s age of 50 meant it would be difficult to get another job, certainly as a flight attendant.
  • Although he gave an incorrect explanation, he did correct it.
  • He had a number of medical and family issues prior to the incident.

The Commission awarded Mr Dawson 26 weeks’ pay, the maximum compensation that can be awarded in the jurisdiction.

Qantas successfully appealed the decision. A Full Bench of the Commission decided that termination was not unfair. Primarily, the Full Bench decided that the description by the Commissioner at first instance of the attempt to mislead the investigation as an ‘incorrect explanation’ understated the severity of the events. The Full Bench emphasised that Mr Dawson only came clean when directly confronted by the investigator’s findings regarding how the alcohol came into his possession. The relatively trivial value of the items stolen was not considered a factor weighing in favour of Mr Dawson.

The Full Bench also said:

“We note the Applicant has been a long serving employee of the Respondent for 28 years and that, at 50 years of age, it may be difficult to gain employment as a flight attendant. Further, we empathise with the personal, family and financial circumstances of the Applicant. However, we are not satisfied that those circumstances outweigh the prohibited conduct the Applicant engaged in when employed by the Respondent. Additionally, the assertion that other employees were allowed to go to the toilets with their bags prior to the search being undertaken, even if accepted, does not detract from the fact that the Applicant removed the alcohol from the aircraft and misled the Respondent during its investigations.”

So in November 2016, Mr Dawson won his unfair dismissal claim and was awarded 26 weeks’ compensation, but by March 2017, he had lost his unfair dismissal claim, and would have been left with his (likely) significant legal expenses.

What should you do if you believe that an employee has stolen from the business?

There are a number of steps that need to be taken, most of them critical, if you are considering dismissing an employee for theft.

  • Stand the employee down on pay while you investigate.
  • Gather any evidence you have, including speaking to witnesses and viewing CCTV footage, that proves that the conduct occurred.
  • Invite the employee to a meeting and let them know before the meeting that they will be required to answer serious allegations of theft, and that they may bring a support person to the meeting.
  • At the meeting, explain the allegations, put the evidence to the employee (including showing them any footage), and give the employee a genuine opportunity to give you an explanation.
  • If the employee gives you an explanation that doesn’t involve theft, you need to investigate the employee’s explanation, e.g. if the employee says that they had been authorised to remove property, find out by whom, and interview that person specifically about the employee’s assertion.
  • If you come to the conclusion that the employee did steal from you, best practice is to engage in a ‘show cause’ process, where you invite the employee to address you on the question of appropriate disciplinary outcome.

Emma Watt is an independent industrial relations consultant who has, for more than 20 years, provided advice and assistance to employers in the timber industry. She has also worked as an unfair dismissal conciliator with the Fair Work Commission. Emma is very keen to ensure that employers know their rights and obligations, so they can sleep well at night!