2 min read

Summary dismissal found to breach employment contract

The Case

Mitchell-Innes v Willis Australia Group Services Pty Ltd (No 3) (2015)

During a company training conference, employees of Willis Australia Group Services Pty Ltd (Willis), including the General Manager for NSW, Mr Mitchell-Innes, headed out for drinks after dinner. The drinks lasted into the early hours of the morning, and Mr Mitchell-Innes became intoxicated.

When he returned to the motel, he discovered he had lost his room key and fell asleep on a park bench. The next morning, Mr Mitchell-Innes participated in the conference from 9am, despite appearing to be slightly affected by alcohol.

Willis investigated and summarily dismissed Mr Mitchell-Innes. Mr Mitchell-Innes commenced proceedings against Willis, claiming wrongful dismissal.

The Verdict

The NSW District Court was not satisfied that Mr Mitchell-Innes had engaged in serious misconduct, and was therefore not satisfied that the summary dismissal was justified.

The Court held that Mr Mitchell-Innes had been wrongfully dismissed and that the dismissal breached the employment contract. It noted that alcohol consumption, in a work context, was not uncommon among Willis employees and that, while Mr Mitchell-Innes “was not at his best” at the conference, this one-off infraction in almost 10 years’ employment didn’t warrant summary dismissal.

The Court awarded Mr Mitchell-Innes nearly $300,000 in damages, including:

  • long service leave, which Mr Mitchell-Innes would have received within a few months if he had not been wrongfully terminated;
  • lost salary;
  • loss of a retention bonus; and
  • interest.

Willis has since lodged an appeal.

The Lesson

Be very careful before summarily dismissing an employee. If a court finds that the circumstances did not warrant such action, you may be found to have breached the employment contract by wrongfully dismissing the employee.

In the district court, a breach of contract claim as a result of wrongful dismissal may result in a higher award of damages than the FWC can award for an unfair dismissal, which is limited to a maximum 6 months’ compensation.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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