Performance management or wage theft: that is the question.

Employers are often faced with disciplinary issues that requires a clear understanding of workplace laws to determine an appropriate response.

A question that we often receive from members is whether a certain type of conduct would justify disciplinary action, or even termination.

In a recent case, the NSW Industrial Relations Commission provided guidance to employers to distinguish between conduct that requires performance management, and when that conduct constitutes time theft and serious misconduct.

About the case

In Tohi v Department of Communities and Justice [2026] NSWIRComm 1028 (15 April 2026) the NSW Industrial Relations Commission considered the dismissal of a Sheriff’s Officer employed by the Department of Communities and Justice. The employee, Mr Tohi, had over 11 years of service with no prior disciplinary history.

The allegations included:

1. failure to properly screen entrants to a courthouse
2. inappropriate mobile phone use
3. early closure of a security checkpoint, and
4. inaccurate recording of working hours on flex-time sheets.

The Commission drew a critical distinction between categories of conduct:

• – Operational non-compliance (e.g. not screening entrants, phone use, early closure) was found to reflect a workplace culture and longstanding management tolerance, rather than deliberate wrongdoing.
• – Time recording inaccuracies, particularly two entries where the employee recorded working hours significantly beyond when he had actually left, which were found to be deliberate and dishonest.

The Commission held that knowingly claiming unworked hours constituted ‘time theft’ and found this conduct to be of such a serious nature that it justified dismissal, despite the mitigating factors. The unfair dismissal application was therefore dismissed

Distinguishing time theft from general misconduct

The decision provides useful guidance for employers in separating time theft from broader misconduct or poor performance:

• – Time theft (dishonesty-based misconduct):
  • involves intentional falsification of hours worked or entitlements
  • requires a finding of knowledge and deliberateness
  • Even relatively small amounts of time can justify dismissal due to breach of trust, particularly in roles involving autonomy and trust.
• – General misconduct or performance issues:
  • May include failure to follow procedures, negligence, or misuse of work time.
  • Where such behaviour is systemic, tolerated, or inadequately managed, it may not amount to serious misconduct.
  • The Commission emphasised that conduct arising from ‘workplace custom and systemic management failures’ should be dealt with through a performance management process.

In essence, dishonesty is the dividing line.

Key takeaway

The case of Tohi reinforces that ‘time theft’ constitutes dishonest and deliberate conduct. While employers must actively manage and correct poor workplace practices, termination is justified where there is clear evidence of deliberate dishonesty, even if the quantum of loss is relatively small.

If you have any questions about workplace obligations or employee management concerns, please contact the Workplace Relations Team: 

📞 (02) 6175 5900
📧 workplace@mba.org.au