Don’t allege fraud or serious misconduct unless you have the evidence!

In the case of McKerrow v Sarina Leagues Club Incorporated T/A Sarina Leagues Club [2012] FWA 1251, Fair Work Australia had to consider whether the unauthorised use of large sums of money was grounds for serious misconduct.

Ms McKerrow was terminated from her employment by Sarina Leagues Club (SLC) for the alleged misappropriation of funds. Ms Michelle McKerrow was working at SLC as a Functions/Administration Manager for approximately one year. During her employment, Ms McKerrow used SLC’s funds to pay an invoice on behalf of the Sarina Junior Rugby League Club (the Club). Nevertheless, the funds were repaid to SLC prior to the discovery of the transaction. When SLC later discovered the transaction, it was alleged by SLC that Ms McKerrow tried to conceal the transaction. Ms McKerrow was consequently terminated from her employment on grounds of gross misuse of SLC’s funds constituting misappropriation and fraud. At the Hearing, SLC further alleged that Ms McKerrow was involved with the disappearance of $10,000.00 from the TAB sweeps within the SLC.

At the Hearing it was held that Ms McKerrow was dismissed unfairly because it was harsh, unjust and unreasonable. It was harsh because she was terminated summarily. It was unjust because SLC could not provide sufficient evidence to demonstrate that the payment of the Club’s invoice was a misappropriation of funds or fraud. It was unreasonable because SLC had made the decision to terminate Ms McKerrow without sufficient evidence to prove she was guilty of misappropriation or fraud.


  • If you are planning on terminating a member of staff on grounds of serious misconduct, you should first conduct a thorough investigation.
  • If you do not have the evidence to demonstrate serious misconduct, you should consider placing your employee on a performance improvement plan or take alternative disciplinary action.

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This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.