Allegation Letter Error Ends in Unfair Dismissal Finding

Unfair Dismissal Allegation: When the Letter Overstates the Evidence

A recent Fair Work Commission decision on an unfair dismissal allegation is a clear lesson in what happens when an allegation letter says more than the evidence actually supports, and when conduct and performance concerns get run together instead of being dealt with separately.

The facts

Ms T was an Assistant Accountant at a property and building management company. She had already been through a performance improvement plan and received a written warning about her professional judgement and accuracy. Then the company discovered that an invoice she had processed had somehow had its value changed in the accounting system from $185 to $56,100, and that she had later reversed the entry herself without escalating it. The company commissioned its accounting systems contractor to produce an audit report on the incident.

Based on that report, the company issued Ms T an allegation letter accusing her of altering the invoice and approving it outside her financial delegation. On the same day, it also issued a separate performance concerns document raising four unrelated issues under the heading “Show Cause, Performance Concerns.” Ms T was suspended on pay and given a short period to respond. She did, explaining in detail that the invoice change was a data entry error she had caught and corrected herself. The company terminated her employment anyway, citing a serious breach of the standards expected of her position and risk to its financial integrity.

What the investigation actually established

The audit report the company relied on never conclusively identified who had changed the invoice value. It only showed that the approval record captured Ms T's details, because the system records whoever approved the entry, not necessarily whoever entered the figure in the first place.

The Commission also found there was no communicated policy requiring escalation of a reversal like the one Ms T made, despite that being one of the two core allegations against her. And the decision maker's own evidence, given under cross examination, showed the case against Ms T had blurred together two different things: a specific, serious, but ultimately unproven conduct allegation, and a broader set of performance concerns that had never been properly put to her as the real reason for the dismissal.

The Commission's findings on the unfair dismissal allegation

The Commission found there was no valid reason for dismissal based on conduct. The invoice change was accepted as a genuine data entry error, self corrected, with no breach of any actually communicated protocol and no dishonesty involved.

The Commission did find a valid reason based on capacity. Ms T's performance had genuinely fallen short in professional judgement, validating invoices before approval, and accuracy.

But even with that valid reason in play, the dismissal was still found unfair, because the company never properly told Ms T that performance, not misconduct, was the real basis for ending her employment. The allegation letter and the termination letter both framed the case as a serious conduct breach. The performance concerns document issued the same day addressed four specific issues that did not capture the broader concerns the decision maker actually relied on. The Commission described the result as a heavy handed and confusing process, and an attempt to characterise a performance based decision as conduct related, and found Ms T had been denied procedural fairness. She was awarded compensation, reduced by 50 percent to account for her own delay in looking for new work.

What this means for your organisation

This case is a useful checklist for anyone drafting an allegation letter. Before you put one to an employee, it's worth asking three questions.

Does the evidence actually establish what the allegation claims, or only something adjacent to it? Here, the audit report showed who had approved the entry, not who had changed it, and the letter treated those as the same thing.

Is there a communicated policy or standard that was actually breached? An allegation that assumes a rule existed, without evidence the employee was ever told about it, is on shaky ground from the outset.

If performance is the real concern, does the letter say so? Dressing a performance issue up as misconduct because it sounds more serious, or more defensible, is exactly what turned a fundamentally sound decision into an unfair one here.

The takeaway

The company had a genuine, ultimately valid concern about Ms T's performance. But by dressing that concern up as a serious misconduct allegation the evidence did not support, and by never clearly telling her that performance was the actual reason for the decision, it lost what should have been a defensible dismissal.

An allegation has to accurately describe what the evidence shows, not what looks more serious or more defensible on paper. And the person facing it is entitled to know the real reason being relied on before the decision is made. Get either of those wrong, and even a fundamentally sound underlying decision can be found unfair.

This is exactly the kind of scenario covered in our free 90 minute workshop on writing procedurally fair allegations, run over Microsoft Teams directly for your organisation. Get in touch if you would like to arrange one for your team.

This article is general commentary based on a published Fair Work Commission decision and is not legal advice. Names and identifying details have been removed.