Jacquie Seemann

Do criminal charges against an employee automatically result in termination of employment?

Jacquie Seemann

15 February 2017

Employment Disputes

Criminal charges against a teacher will not automatically result in the termination of the teacher’s employment without the employer taking proactive steps, says a recent Federal Court of Australia decision.

The decision resolves a discrepancy between two Fair Work Commission Full Bench (FWCFB) decisions dealing with teachers, White v Mahony [2015] FWCFB 4952 (Mahony’s case) (which we considered in our blog of 21 August 2015), and O’Connell v Catholic Education Office, Sydney [2016] FWCFB 1752 (O’Connell’s case).  Following those two decisions, it was unclear whether criminal charges automatically terminated an employee’s employment, or whether the employer needed to take proactive steps to make this occur.

Section 386(1) of the Fair Work Act 2009 (Cth) (FW Act) provides that an employee is only ‘dismissed’ (for the purposes of an unfair dismissal claim) if the employee’s employment is terminated on the employer’s initiative. Both Mahony’s case and O’Connell’s case focused on the issue of whether the Catholic Education Office, Sydney (CEO) ‘dismissed’ these employees after they were charged with assault, and as a result whether the employees had the right to apply for an unfair dismissal remedy.

Relevantly to both cases, section 9 of the Child Protection (Working with Children) Act 2012 (NSW) (CP Act) provides that an employer must not continue employing a person in child-related work if the worker does not have clearance or is subject to an interim bar.

In Mahony’s case, the FWCFB took the view that, because of section 9 of the CP Act, the continuation of his employment was not possible as this would have been illegal. Accordingly, the FWCFB found that  Mr Mahony was not ‘dismissed’ – that is, the termination was not at the initiative of the CEO but simply happened as a result of the illegality.

However, in O’Connell’s case, the FWCFB disagreed with the decision in Mahony’s case.  It held that the CP Act requires only that a person who becomes a disqualified person not be utilised to perform ‘child-related work’. Section 9 does not require that such a person be immediately dismissed; an employer may decide to dismiss an employee in such circumstances, but is not required to do so. Further, any such dismissal would be a termination of employment on the employer’s initiative.

On appeal in Mahony v White [2016] FCAFC 160, the Federal Court resolved the discrepancy.  It agreed with the FWCFB in O’Connell’s case that the termination of the employment was at the initiative of the CEO – it was the act of CEO that brought the employment to an end. Even if the CEO was required to dismiss a teacher because of some statutory obligation, such as an obligation under the CP Act, compliance with that obligation required the CEO to take the initiative to bring the employment to an end.

Because the Federal Court determined that Mr Mahony’s and Mr O’Connell’s unfair dismissal claims were competent, it did not decide the point about whether the CEO had a statutory obligation under section 9 of the CP Act to end the teachers’ employment. It did note, however, that the CEO was likely to rely on this point in Mr Mahony’s case when the FWCFB determined whether his dismissal was harsh, unjust or unreasonable.

Lessons to be learned

If you are faced with an employee being charged with a criminal offence, even one involving serious issues such as child sexual assault, do not assume that the employment has come to an end by itself.  If the employment is to come to an end, you as employer will need to take proactive steps to achieve this – and there may be other options open to you.  We recommend that you first seek legal advice to ensure you discharge your legal obligations, and to reduce the risk of a dispute with the employee about the dismissal.