Managing people

Breach of a company policy – consider unfair dismissal     

Company policies are not regulated by law, but do provide a basis for employee conduct in the workplace. Learn more about company policies here.  

This article discusses the reason for a dismissal being in breach of a company policy, in the context of unfair dismissal. 

It is common for a company to have policies that relate to matters that are not regulated by law but rather are based on standards set by the employer in an effort to ensure a high standard of behaviour in the workplace. A breach (or breaches) of a company policy can result in an employee’s dismissal. 

A company policy should also include a ‘Code of Conduct’. This instrument usually incorporates policies relating to employee behaviour at work (and outside work hours), as well as their responsibilities towards the employer and to company property, and other matters such as fighting, language, dress standards, smoking, alcohol and drug use, confidentiality, other employment, maintaining the workplace, borrowing company property and theft.  

Setting policies in these areas indicates to employees the standard of behaviour that is expected of them and what the consequences of a breach of the policy will be, including the possibility of dismissal. However, having a company policy on a particular issue does not necessarily provide a valid reason for dismissal in an unfair dismissal matter before Fair Work Australia (FWA). 

The company policy - validity

A breach of an employer’s policy involving or amounting to a failure to obey a lawful and reasonable direction of the employer will amount to a valid reason for termination in the sense of a reason that is ‘sound, defensible or well-founded. A failure to comply with a direction to do or refrain from doing something in compliance with an employer’s policy will not provide a valid reason for termination of employment if: 

  • the policy, or a direction to comply with the policy, is illegal 
  • the policy does not relate to the subject matter of the employment or matters affecting the work of the employee 
  • the policy, or a direction to comply with the policy, is unreasonable. 

Employers can put into operation policies and give directions to employees as they see fit, but they cannot exclude the possibility that the dismissal of an individual for non-compliance may, in particular circumstances of an individual case, be harsh, unjust or unreasonable. 

Legality of policy 

In justifying the relevance and legality of a company policy, the employer may refer to relevant legislation. For example, a number of company policies may refer to the employer’s duty to ensure the health, safety and welfare of its employees under the relevant state or territory occupational health and safety legislation. 

A company policy may still be relevant to particular employee behaviour in a broader sense. For example, a policy that prohibits the sending of hard-core pornographic and other offensive content by email at work would be considered relevant in relation to a number of issues. The justification of such a policy is the duty of the employer to provide a working environment free of conduct that has the potential to result in discrimination, harassment, offence and distraction from the duties and the responsibilities at work of employees. If the employer did not take active steps to eliminate traffic of this kind on its email and other electronic communication systems it may incur legal liability, under anti-discrimination legislation, for example. 

Knowledge of company policy

In having a company policy relating to particular employee conduct in (or outside) the workplace, it is also the responsibility of the employer to ensure the awareness of the existence of company policies. Training on this issue is usually included as part of an employee’s induction process. The Code of Conduct should contemplate a spectrum of disciplinary action for breaches of applicable policies, up to and including termination of employment. 

Dismissal, including instant dismissal

Dismissal should be regarded as the most serious application of a company policy. Generally, an employee’s dismissal can occur in the following situations: 

  • where a final warning has failed to modify the work performance or behavioural standards as required 
  • as the first and/or final step in the disciplinary procedure where the lapse in performance or behavioural standard is of such severity as to warrant dismissal at that time. 

Chronic breach of company policies

In many instances, a breach of a company policy by an employee may, of itself, be a relatively minor matter. However, a constant breach of company policies by an employee can result in a valid reason for termination. In an unfair dismissal matter before FWA, the tribunal considered circumstances where the applicant admitted breaches to company policy including: 

  • using his mobile phone while on duty and obviously not having it turned off 
  • recording incorrect start and finish times on his timesheet 
  • not providing reasonable notice of his inability to attend work 
  • purchasing items for his own use, contrary to the staff purchasing policy 
  • taking time off without the supervisor’s approval. 

Taken individually, each of these incidents might not be regarded as particularly serious — minor indiscretions — and certainly not, on their own, a sufficient basis to constitute a valid reason for dismissal. However, each of the examples above cannot be disaggregated from a consistent pattern of behaviour which is confrontationist, argumentative and insubordinate.  

FWA concluded that the applicant’s conduct over a long period of time was inconsistent with any intention he had of maintaining his obligation to the integrity of the employment relationship. It should also be noted the employee received a number of verbal, written and final written warnings regarding each breach of company policy.  

See: Dickinson v Calstores Pty Ltd [2012] FWA 6858. An appeal against the decision was dismissed.

Your HR sidekick

From contracts of employment to letters of termination and everything in between, My Business Workplace has got you covered.

Found this useful?

Subscribe to our newsletter and receive the best business tips and articles straight to your inbox.

Thank you for signing up to our newsletter. You're one step closer to receiving more insightful information to help better your business.

We take your privacy seriously and by subscribing to our newsletter you agree to the terms of our Privacy Policy available below.