Serious Misconduct: The Regulatory Framework

Last Updated on 13/03/2026 by Damin Murdock

In 2026, the standard for “serious misconduct” remains primarily governed by Regulation 1.07 of the Fair Work Regulations 2009. Serious misconduct is conduct that is so significant it may justify summary dismissal (dismissal without notice).

Under the regulations, serious misconduct generally falls into two categories:

1. Wilful or Deliberate Behaviour: Conduct that is inconsistent with the continuation of the employment contract.

2. Conduct Creating Imminent and Serious Risk: Actions that cause a serious risk to the health and safety of a person, or to the reputation, viability, or profitability of the employer’s business.

Common Examples of Serious Misconduct:

• Theft, Fraud, or Assault: Criminal acts committed in the course of employment.

• Intoxication: Being under the influence of alcohol or drugs such that the employee is unfit for duty.

• Insubordination: A refusal to carry out a lawful and reasonable instruction consistent with the employment contract.

• Sexual Harassment: Under the Fair Work Act, sexual harassment is expressly recognized as a “valid reason” for dismissal. While it is assessed on its facts, it often meets the threshold of conduct striking at the heart of the employment relationship.

Section 387: Was the Dismissal “Harsh, Unjust or Unreasonable”?

The FWC uses Section 387 of the Fair Work Act as a multi-factor checklist to evaluate a dismissal. Even if an employee committed misconduct, the dismissal may still be found unfair if the employer’s process was flawed.

Core Definitions:

• Harsh: Focuses on the consequences for the employee (e.g., extreme financial hardship) or whether the “punishment fits the crime.”

• Unjust: Occurs if the employee was not actually guilty of the alleged misconduct.

• Unreasonable: Occurs if the employer’s conclusion was not reasonably supported by the evidence available at the time.

Procedural Fairness Checklist:

The Commission must take into account:

• Valid Reason: Was there a reason related to capacity or conduct?

• Notification: Was the employee notified of the specific reason?

• Opportunity to Respond: Was the employee given a genuine chance to answer the allegations?

• Support Person: Did the employer unreasonably refuse a request for a support person?

• Warnings: For performance-related issues, was a prior warning given?

The Small Business Fair Dismissal Code

If your employer has fewer than 15 employees (at the time of dismissal), the Small Business Fair Dismissal Code applies.

• If the FWC is satisfied that the employer followed the Code, the dismissal will not be found unfair.

• The Code provides a streamlined set of rules for small business owners, emphasizing that a valid reason and a fair chance to respond are still required.

How Leo Lawyers Can Help

The outcome of a Fair Work application often depends on the strength of the evidence regarding procedural fairness. At Leo Lawyers, we represent both employers and employees to ensure that the Section 387 factors are correctly addressed.

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DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.