Historic Misconduct Leads to Unfair Dismissal Finding by Fair Work Commission

A recent Fair Work Commission (‘FWC’) judgment has highlighted that past misconduct doesn’t necessarily justify dismissing an employee, even if it is serious. In Stephan Matthai v The University of Melbourne [2025] FWC 1938, the FWC found that dismissing a professor for conduct that had occurred seven years earlier was unjust and too severe.

The Facts of the Case

Dr Stephan Matthai joined the University of Melbourne in 2015 as a professor under its enterprise agreement. In 2017, he exchanged personal and affectionate communications with a PhD student whom he supervised. The student became uncomfortable and later sought a change in supervisor. While no formal complaint was made at the time, the University was aware of the situation.

Several years later, in 2024, the student raised concerns about sexual harassment. An independent investigation concluded that, although the communications were inappropriate and breached workplace behaviour policies, they did not constitute harassment. Despite this finding, the University dismissed Dr Matthai for serious misconduct, seven years after the events in question.

The FWC’s Reasoning

The FWC’s analysis turned on three main issues:

Connection to Employment

The FWC accepted that communications between a supervisor and a PhD candidate, even outside working hours, fall within the scope of the employment relationship between Dr Matthai and the University. The inherent power imbalance and the student’s reliance on the supervisor meant that the messages had workplace implications. This established a valid reason for disciplinary action.

Delay & Fairness

The decisive issue was the University’s delay. Although it knew of the conduct in 2017, it did not investigate or take action until 2024. By then, Dr Matthai had continued his employment without incident and had no reason to believe his position was at risk. The FWC found that such a lengthy delay undermined the fairness of dismissal, especially as he could not defend himself effectively against stale allegations.

Proportionality of the Penalty

Even though a breach of employment policy had been established, the FWC considered whether the dismissal was proportionate. Key factors included:

• the age of the misconduct;
• the absence of repeat behaviour;
• Dr Matthai’s otherwise clean employment record; and
• the absence of risk of recurrence.

Taken together, the FWC concluded that dismissal was excessively harsh.

Outcome

The FWC found the dismissal to be harsh, unjust, and unreasonable. Key contributing factors were the historical nature of the conduct and the delay in acting, which disadvantaged Dr Matthai (lost opportunity for other employment as he aged). The FWC ordered his reinstatement.

Lessons for Employers

Employers should take three important takeaways from this decision:

Act promptly if misconduct is alleged

Even if the alleged misconduct seems old, if there is reason to investigate, waiting for many years can undermine the ability to lawfully dismiss, especially if the employee has been unaware or able to show changed behaviour.

Be clear about policy compliance

Employment policies should clearly define expectations for supervisor-supervisee relationships, boundaries, and behaviour, particularly in academia or roles involving mentoring or supervision, even outside formal work settings.

Assess severity, timing and record

In determining whether termination is justified, FWC looks at whether the conduct was wilful, serious, whether the employer was aware earlier, what delay occurred, how the employee has behaved since, and whether reparation or reinstatement is realistic.

Contact Us

For more information, contact Bambrick Legal today. We offer a free, no-obligation 30-min consultation for all enquiries.

• Fill in our enquiry form here
• Call us on 08 8362 5269
• Like us on Facebook
• Follow us on LinkedIn

Read more about our Employment Law services here.

Related Blog – What to Do if Sexually Harassed at Work