Managing risk

Club loses appeal against unfair dismissal finding in ‘stolen’ drink case

The Fair Work Commission has dismissed a club’s appeal against an unfair dismissal finding after they alleged an employee had stolen a drink, and sacked her.  Read why the club lost the appeal.

18 June 2024

Accused of stealing a drink, and sacked

When a stock audit in 2023 revealed a club was missing a significant amount of stock, they made changes to the company’s policy and staff handbook regarding the consumption of food and beverages by staff without payment. All staff were sent the amended handbook with a memo outlining the changes, and a staff meeting was scheduled to discuss the changes.

After the meeting, some of the staff headed for one of the club’s bars to socialise.

When another stocktake the following week revealed further considerable stock variances, the club reviewed the CCTV footage covering a period after the staff meeting, and suspended some employees.

The club began an investigation, during which one of the workers who’d been suspended was offered the option of resigning, failing which she’d be dismissed. She declined to resign, and was summoned to a meeting where she was given a letter saying her employment was terminated with immediate effect for theft on the day of the meeting and dishonesty during the investigation.

The evidence showed that in the bar after the meeting, she was given a drink, but the bartender didn’t put the transaction through the point of sale machine and she didn’t pay. The club alleged this was misconduct, though she said she had not intended to avoid payment.

The worker applied to the Fair Work Commission claiming unfair dismissal. At the hearing, the Deputy President (DP) characterised the dispute as whether the worker’s failure to pay for the drink was deliberate.

The CCTV footage showed the worker receiving her drink then moving her phone towards the EFTPOS machine but not tapping it. The DP considered these actions were consistent with the worker intending to tap the card reader, seeing no payment recorded on its screen, assuming she’d already paid, then not tapping it.

The DP found the worker honest and credible, and contrasted her case with that of other club employees who were observed many times falsely ringing up drinks on the cash register without payment and pretending to use a phone to pay for drinks without actually paying. The DP said this suggested preplanning, but there was no evidence the worker had preplanned. She suggested the club’s view of the worker was tainted by the actions of the other employees who provided free drinks.

The DP noted the bartender’s evidence that the worker hadn’t asked for a free drink, and concluded that on the balance of probabilities, though the worker should have been more vigilant in ensuring she paid for her drink, she did not deliberately steal a drink. The alleged misconduct did not occur, and she had not been dishonest in responding to the allegations.

The DP said the worker’s good employment history and remorse were such that the incident could instead have been dealt with through a verbal warning.

Moreover, she also determined that the use of the words ‘fraud’ and ‘theft’ by the club in relation to the worker was intimidatory, that the club’s intention in using these words was to suggest that the worker had engaged in criminal behaviour. The worker was studying nursing, and there was a risk that such serious findings may have an adverse impact on her ability to commence a career in that profession.

The DP said this was ‘unconscionable’, because ‘intent is required and the conduct must be established to the criminal standard of proof’.

Though the club was entitled to investigate breaches of its policies, it had instead come to ‘baseless conclusions’. The worker’s dismissal was harsh, unjust and unreasonable and therefore unfair, and she was entitled to compensation.

 

The club’s appeal

An appeal to a Full Bench exists for the correction of errors, not to hear the case again from scratch.

The worker claimed she had no recollection of the incident and was unaware she’d received a drink without paying, as she’d paid for drinks before and after the drink in question.

The club disputed her submission, saying it was inconceivable, on viewing the CCTV footage, that she could have formed the view she’d already paid for the drink before taking it.

The Full Bench of the FWC found no error in the DP’s conclusion that the CCTV footage did not establish that the worker had intentionally taken the drink without paying, and rejected the contention that her acceptance of the drink was opportunistic misconduct.

Deputy Presidents Richard Clancy, Lyndall Dean and Alex Grayson disagreed with the DP’s assertion that the club had used the words ‘theft’ and ‘fraud’ to intimidate the worker, but did not consider this a significant error.

They also disagreed with the DP’s apparent suggestion that before an employer dismisses an employee for theft, citing it as a valid reason for the termination, they must establish beyond reasonable doubt that the theft occurred. Nor did they agree that the club had acted in an unconscionable manner. Based on the CCTV footage, the club was genuinely concerned, but the standard of proof was ‘on the balance of probabilities’, rather than ‘beyond reasonable doubt’.

Nevertheless, the Full Bench was satisfied that the DP had applied the correct standard of proof when considering whether there was a valid reason for the dismissal.

The Full Bench affirmed the DP’s conclusions that there was no valid reason for the worker’s dismissal, that it was harsh, unjust and unreasonable, and dismissed the club’s appeal.

 

What it means for employers

Employers need to be sure they’re taking all circumstances into account and correctly interpreting the evidence before alleging misconduct justifying dismissal, and before appealing an unfair dismissal finding.

 

Read the judgment

Coogee Legion Ex-Service Club Ltd v Deanna Giblin [2024] FWCFB 270 (29 May 2024)

Gaby Grammeno

Contributor

Gaby has extensive experience as a researcher, writer, editor and project manager on a wide variety of information products, including books, guides, reports and submissions.

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