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Failure to obtain proper licences is a terminable offence

It is a common practice to insert generic clauses into employment contracts which state that failure to maintain a licence may result in summary termination. Often these clauses are unenforceable and cause employers difficulty when they go to dismiss an employee because they’ve lost their licence. These clauses will be unenforceable if the licence does not relate to an inherent requirement of the employee’s role. Even in those cases, this would not automatically be grounds for summary termination and you would need to ensure you provide procedural fairness before any termination takes place.


The case of Neville v Lake Fox Limited T/A Rocky’s Own Transport Company [2020] FWC 5809 (30 October 2020) is a perfect example of the right way to terminate an employee if they do not have the right licences, especially if there are safety concerns.

The employee in this case was a long-distance road train driver, involved in transporting dangerous goods. It was a legal requirement that he hold a dangerous goods licence, and without the licence he was unable to work for his employer. He did not want to transport ammonium nitrate emulsions and continually put off obtaining a licence, even though it had always been a requirement for his role, and was a breach of the employer’s policies.

For over a year, the employee also dishonestly claimed to have lost his dangerous goods licence and was replacing it, and refused to provide evidence of the licence until a disciplinary process was started. At this point he was able to produce the licence within an hour of the request.

There were also several other safety breaches and misconduct reported in the form of:

  • dashcam footage of him driving with his seatbelt unfastened on three separate occasions;
  • sticking a “one finger salute” to the company dashcam;
  • driving the train in excess of the speed limit; and
  • smoking while transporting dangerous goods.

The Fair Work Commission found that the employer provided valid reasons for dismissal, they undertook a fair show cause process, and the employee was provided ample opportunity to respond before being terminated.

Lessons for employers

  • Care in drafting the contract allows you to take advantage of the decision of DA v Baptist Care SA [2020] FWCFB 6046 (20 November 2020).
  • Where it is a government direction that holding a licence is an inherent requirement of the job, even failures in the process by third parties (not the employer) will not prevent termination of employment.
  • Avoid inserting clauses relating to licence management, unless it is linked to the inherent requirements of the role.
  • Keep a record of all employee licences, make it a contractual obligation to provide evidence of the licence each time it is renewed, and ensure valid copies are provided if they are required for safety reasons.
  • Even if you have a valid reason, always ensure a fair process to reduce the risk of an unfair dismissal.

Written by Nina Hoang

Have a question or need advice?

Our team is here to provide the right advice for your business and workforce. If you have a question or require assistance, please contact Kim McLagan.


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