From final warning to Fair Work Commission – the risks of internal investigations for employee misconduct

Introduction

Procedural fairness is an important factor in a disciplinary process and plays an integral role in determining whether a dismissal will be considered to be unfair under the Fair Work Act 2009 (Cth).

Employees must be allowed to know the allegations against them and provided with a reasonable opportunity to respond to those allegations. In cases of possible misconduct by an employee, workplace investigations will often form a key aspect of an employer’s compliance with this requirement.

In some cases, an employer will need to engage an external investigator to perform an independent investigation in order to avoid concerns of bias or lack of transparency in the disciplinary process.

The recent decision of Murphy v Xavier College Limited [2025] FWC 1284, provides a timely reminder of this fact. In this case, a teacher with 21 years of service was found to be unfairly dismissed, despite there being a valid reason for dismissal due to misconduct.

A large factor in this decision was that, despite the College making efforts to adhere to the principles of procedural fairness during its internal investigation, the teacher was found not to have been allowed an adequate opportunity to respond to the allegations against him.

Background

The employee taught Latin, religious education, Italian and classical Greek at the College for 21 years, with this job being the only permanent employment the employee ever had.

The employee also had additional duties as an Independent Education Union (IEU) representative and as a health and safety representative (HSR) at the College.

In 2016 and 2022, the employee was issued with formal warnings following investigations into his performance and conduct at the College, with the second warning being stipulated to be a final warning.

As an outcome of the 2022 warning, the employee was placed on a performance improvement plan (PIP) and was required to participate in a mentoring program with the College’s Director of Faith and Service.

At the end of 2023, the employee was involved in identifying health and safety concerns at the College and issued a performance improvement notice to the College in his capacity as HSR.

In early 2024, the College Principal organised a meeting with the employee to discuss the progress of the PIP. However, the Principal cancelled the meeting before it took place in an effort to avoid any perception that it was connected to the employee’s performance of his HSR duties.

During the 2024 school year, concerns were raised in relation to the employee’s performance and conduct at the College, including:

• complaints being raised regarding his failure to provide timely feedback to students
• his failure to maintain a tidy desk area after he had been requested several times to clean his desk area by his superiors.

The investigation

The College began an internal investigation into the employee’s conduct, with the College Principal being the investigator and ultimate decision-maker. The College undertook the usual steps in an investigation associated with affording procedural fairness to an employee, including:

• issuing the employee with a letter of concerns setting out the allegations against him
• inviting the employee and an IEU support person to attend a meeting to respond to the allegations, both initially and then again when further concerns arose regarding the employee’s marking practices
• allowing the employee to provide a written response to the allegations
• inviting the employee to show cause as to why his employment should not be terminated following the substantiation of the allegations.

After considering the employee’s response to the show cause letter, the College decided to terminate his employment due to misconduct and paid him five weeks’ pay in lieu of notice. The employee then made a claim for unfair dismissal in the Fair Work Commission.

In the Fair Work Commission

The Fair Work Commission was required to determine whether the employee’s dismissal was unfair within the meaning of the Fair Work Act. The legal test for an unfair dismissal is whether the dismissal was harsh, unjust or unreasonable.

The Commission accepted that it was open to the College to make a finding of misconduct on the balance of probabilities and that, given he was on his final warning, this formed a valid reason for the employee’s dismissal.

Although this indicated that the dismissal was reasonable, the Commission nevertheless held that the employee’s termination was unfair by way of being harsh and unjust.

Despite the College’s efforts to afford the employee procedural fairness, the Commission found that the employee had not been allowed an adequate opportunity to respond to the allegations against him.

The Commission’s reasoning for making such a finding was essentially that the College’s communications with the employee were such that the employee reasonably concluded that he would not receive a fair hearing from the College and that the decision to terminate his employment had already been made.

Such communications included that when the employee sought to provide further information at the show cause stage, it was reinforced to him that the allegations had already been substantiated and that the only decision remaining was whether to dismiss him or not.

Importantly, the Commission also found that the employee was entitled to a more vigorous investigation than was conducted by the College. Considering the College had engaged external investigators in the past, and the fact that in 2023 the College was cognisant of a need to avoid any perception of connection between the employee’s HSR role and his performance management, the Commission held that it would have been prudent for someone other than the College Principal to be the investigator.

The Commission also held that the dismissal was harsh in the circumstances, particularly given the employee’s 21 years of service at the College and the fact that this was the only permanent employment he had held.

Having been satisfied that reinstatement was not appropriate, the Commission ordered the College to pay the employee $14,121, taking into account a deduction for his misconduct.

Conclusion

This case serves to remind employers that procedural fairness does not consist of mere step-taking. Rather it is dependent on how those steps are carried out.

Employers handling allegations of misconduct against staff should consider engaging an external investigator to carry out an independent investigation in order to avoid concerns that the staff are not being provided with procedural fairness or a reasonable opportunity to respond.

If you have questions about workplace investigations or staff management, please contact a member of our workplace relations and safety team.

Cooper Grace Ward is also conducting a half-day training session on 16 July 2025 on the importance of workplace investigations and how to get them right. If you are interested in attending this training, please contact a member of our team or visit our events page for details.