To determine a valid reason relating to conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred.
The Fair Work Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. The question the Commission must address is whether there was a valid reason for the dismissal.
The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. The Commission must make a finding as to whether the conduct occurred based on the evidence before it.
Inconsistent treatment of previous similar conduct by other employees in the workplace is an issue that can be relevant.
A single foolish, dishonest act may not always, in the circumstances of a particular case, justify summary dismissal.
The failure of the employee to follow the employer's lawful and reasonable directions can constitute a valid reason for dismissal.
Fair Work Regulation 1.07 defines serious misconduct. Serious misconduct is conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment contract. It is also conduct that causes serious and imminent risk to the health and safety of a person or to the reputation, viability or profitability of the employer's business.
Serious misconduct includes theft, fraud, assault, intoxication at work and the refusal to carry out lawful and reasonable instructions consistent with the employment contract.
Where serious misconduct is alleged the test for a valid reason for dismissal does not change. The test remains whether the reason was 'sound, defensible or well founded'. A valid reason for dismissal does not require conduct amounting to a repudiation of the contract of employment.
Where an employee has been dismissed without notice (summary dismissal) for serious misconduct the Commission may find that, although there was a valid reason for the dismissal, the dismissal was harsh because summary dismissal was a disproportionate response.
Where the conduct involves serious misconduct, the principle established in Briginshaw v Briginshaw may be relevant:
The standard of proof remains the balance of probabilities but 'the nature of the issue necessarily affects the process by which reasonable satisfaction is attained' and such satisfaction 'should not be produced by inexact proofs, indefinite testimony, or indirect inferences' or 'by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion.'
The Briginshaw principle does not raise the standard of proof beyond the balance of probabilities. The strength of the evidence needed to establish a fact on the balance of probabilities 'may vary according to the nature of what it is sought to prove'. More serious allegations may require stronger evidence.
'It is only in exceptional circumstances that an employer has a right to extend any supervision over the private activities of employees.'
The out of hours conduct must have a relevant connection to the employment relationship.
Rose v Telstra looked at relevant decisions on out-of-hours conduct and provides the following summary:
In cases involving out of hours conduct, it is not sufficient for the employer to simply assert that the conduct will in some way affect the employer’s reputation or compromise the employee’s capacity to perform his or her duties, there needs to be evidentiary material upon which a firm finding may be made.
However if the employee is unable to attend work for a significant period because they are convicted of a serious offence and imprisoned, then the contract of employment may be brought to an end by the operation of law due to frustration.
Generally, in the absence of extenuating circumstances, a dismissal for fighting will not be viewed as harsh, unjust or unreasonable.
Extenuating circumstances include:
The authorities are clear that the Commission must take into account all of the circumstances surrounding the incident and not merely establish who the aggressor was.
Where the employee's conduct or capacity affects the safety and welfare of other employees the Commission may find that this is a valid reason for the dismissal.
Fair Work Regulation 1.07 (which defines serious misconduct) may also be relevant when dealing with Occupational Health and Safety (OHS) breaches that amount to serious misconduct.
The kind of conduct that is relevant need not only be wilful, malicious or intentional conduct, but conduct that can imperil or put other employees in the workplace in jeopardy.
The Commission may take into account the following issues when determining whether there has been a breach of safety:
A substantial and wilful breach of a policy will often, if not usually, constitute a valid reason for dismissal.
However a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. In each case all of the circumstances must be taken into account.
If widespread breaches of policy occur without an employer response then this weighs against a decision that the dismissal was justified and not harsh, unjust or unreasonable.
It is not sufficient to find that there is a valid reason for an employee’s dismissal simply because someone has lost trust and confidence in an employee’s ability to perform their role. There needs to be sufficient evidence and reasoning to support this loss of trust and confidence.
 Edwards v Justice Giudice  FCA 1836 (23 December 1999) at paras 6–7, [(1999) 94 FCR 561]. See also Rail Corporation New South Wales v Vrettos  AIRCFB 747 (Kaufman SDP, McCarthy DP, Blair C, 8 October 2008) at para. 27, [(2008) 176 IR 129]; Container Terminals Australia Limited v Toby, Print S8434 (AIRCFB, Boulton J, Marsh SDP, Jones C, 24 July 2000) at para. 13.
 Walton v Mermaid Dry Cleaners Pty Limited  IRCA 267 (12 June 1996), [(1996) 142 ALR 681 at p. 685].
 APS Group (Placements) Pty Ltd v O'Loughlin  FWAFB 5230 (Lawler VP, O'Callaghan SDP, Roberts C, 8 August 2011) at paras 59–61, [(2011) 209 IR 351]. See also Sexton v Pacific National (ACT) Pty Ltd, PR931440 (AIRC, Lawler VP, 14 May 2003) at para. 32; Electricity Commission of New South Wales t/a Pacific Power v Nieass (1995) 81 IR 46, 66.
 APS Group (Placements) Pty Ltd v O'Loughlin  FWAFB 5230 (Lawler VP, O'Callaghan SDP, Roberts C, 8 August 2011) at para. 56, [(2011) 209 IR 351].
 McDonald v Parnell Laboratories (Aust)  FCA 1903 (7 December 2007) at para. 61, [(2007) 168 IR 375].
 Lambeth v University of Western Sydney  AIRC 47 (Hamberger SDP, 16 January 2009) at para. 70. See also Grant v BHP Coal Pty Ltd  FWCFB 3027 (Richards SDP, Asbury DP, Booth C, 18 June 2014).
 Fair Work Regulations.
 reg 1.07(2)(a).
 reg 1.07(2)(b).
 reg 1.07(3).
 Selvachandran v Peteron Plastics Pty Ltd  IRCA 333 (7 July 1995), [(1995) 62 IR 371 at p. 373]; cited in Annetta v Ansett Australia Ltd, Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at para. 10, [(2000) 98 IR 233].
 Potter v WorkCover Corporation, PR948009 (Ross VP, Williams SDP, Foggo C, 15 June 2004) at para. 55, [(2004) 133 IR 458]. See also Annetta v Ansett Australia Ltd, Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at para. 10, [(2000) 98 IR 233].
  HCA 34 (30 June 1938), [(1938) 60 CLR 336]; cited in Barber v Commonwealth of Australia as represented by the Department of Parliamentary Services  FWA 4092 (Thatcher C, 6 July 2011) at para. 33, [(2011) 212 IR 1].
 ibid., [(1938) 60 CLR 336] at pp. 362‒3].
 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd  HCA 66 (16 December 1992), [(1992) 67 ALJR 170]; cited in Guneyi v Melbourne Health T/A Royal Melbourne Hospital  FWA 10270 (Hamilton DP, 18 December 2012) at para. 14. See also Budd v Dampier Salt Limited  AIRCFB 797 (Giudice J, Lacy SDP, Cargill C, 5 October 2007) at para. 15, [(2007) 166 IR 407].
 Rose v Telstra Corporation Limited, Print Q9292 (AIRC, Ross VP, 4 December 1998); see also Kedwell v Coal & Allied Mining Services Pty Limited T/A Mount Thorley Operations/Warkworth Mining  FWC 6018 (Saunders C, 9 September 2016) at para. 104.
 Rose v Telstra Corporation Limited, Print Q9292 (AIRC, Ross VP, 4 December 1998); cited with approval in Farquharson v Qantas Airways Limited, PR971685 (AIRCFB, Lawler VP, O'Callaghan SDP, Raffaelli C, 10 August 2006) at para. 25, [(2006) 155 IR 22].
 HEF of Australia v Western Hospital, (1991) 33 AILR 249; cited in Rose v Telstra Corporation Limited, Print Q9292 (AIRC, Ross VP, 4 December 1998).
 The AWU-FIME Amalgamated Union v Queensland Alumina Limited  IRCA 346 (17 July 1995), [(1995) 62 IR 385]; cited in Tenix Defence Systems Pty Ltd v Fearnley, Print S6238 (AIRCFB, Ross VP, Polites SDP, Smith C, 22 May 2000) at para. 22.
 Culpeper v Intercontinental Ship Management Pty Ltd, PR944547 (AIRCFB, Marsh SDP, Blain DP, Hoffman C, 23 March 2004) at para. 49, [(2004) 134 IR 243].
 Fair Work Act s.387(a).
 Fair Work Regulations reg 1.07.
 Gottwald v Downer EDI Rail Pty Ltd  AIRC 969 (Richards SDP, 30 November 2007) at para. 102. See also Hudson v Woolworths Ltd  AIRC 912 (Thatcher C, 24 October 2007).
 Butson v BHP Billiton Iron Ore Pty Ltd  FWA 640 (McCarthy DP, 1 February 2010).
 Browne v Coles Group Supply Chain Pty Ltd  FWC 3670 (Hatcher VP, 10 June 2014) at para. 62; citing B, C and D v Australian Postal Corporation T/A Australia Post  FWCFB 6191 (Lawler VP, Hamberger SDP, Cribb C, 28 August 2013) at para. 36, [(2013) 238 IR 1].
 B, C and D v Australian Postal Corporation T/A Australia Post  FWCFB 6191 (Lawler VP, Hamberger SDP, Cribb C, 28 August 2013) at para. 48, [(2013) 238 IR 1]]; see also Lee v Superior Wood Pty Ltd  FWCFB 2946 (Sams DP, Gostencnik DP, McKinnon C, 1 May 2019).
 ibid., at para. 67.
 Mammarella v Department of Parliamentary Services  FWC 6340 (Harper-Greenwell C, 11 September 2019) at para. 61.