ALDI is a German discount supermarket, comparable to Pak’N’Save in New Zealand. Founded by the Albrecht brothers after WWII, it is arguably one of the most successful food stores on the planet, with around 4000 branches in Germany and more than 8000 world wide. Its success is mainly based on a strict and uniform ‘no frills’ approach, meaning no advertising and no flash displays – products are rolled in on pallets and are replaced when empty. Stock variety is also limited and mostly own-branded, but everything is good quality. Logistics and warehousing has been thought through to perfection, so that overheads and storage costs are extremely low. However, salaries are way above average for every employee, from cash-out operator to GM.
Aldi started operating in Australia in 2001 and has so far opened around 200 branches. Recent plans to expand into New Zealand have unfortunately been put on hold for the time being as the company wants to achieve a certain market penetration in Australia first.
This all by way of background to explain the context of Narwal v Aldi Food Stores Limited, an unfair dismissal case, in which Aldi dismissed Mr Narwal after he took goods from the store without paying. It sounds like theft, but Mr Narwal claimed he had forgotten his wallet, suspended the sale, and paid for the goods immediately after. Fair Works Australia found that the dismissal was unjustifable because Aldi could not prove that Mr Narwal acted dishonestly.
Why is that decision noteworthy? It is because Aldi’s decision to dismiss shows a German approach to Australian employment law. Under German employment law, the employer can justifiably dismiss for any act of dishonesty, regardless how insignificant, based on a traditional understanding that trust and confidence in an employment relationship is absolute and paramount. The employer can even dismiss without any proof of wrongdoing by the employee as long as, at the time of the dismissal, respective circumstantial facts exist, allowing the conclusion that in all likelihood the employee was at fault. Although the Court may still assess whether the employer ‘could’ still continue the employment relationship, the high standard of trust and confidence usually prevents reinstatement. These long established standards made headlines when in 2010 a checkout operator was dismissed after 31 years of service for taking two vouchers valued at EUO 1.30 without permission (“Case Emmely”). The High Court upheld the dismissal, but on appeal the Federal Employment Court decided that the dismissal was unjustified. Although the employee’s action constituted misconduct, it was of such minor nature that it did not destroy the trust inherent in an employment relationship of such long standing. The decision is groundbreaking as it signals a complete new approach to minor-misconduct cases, which have traditionally been decided on a one-strike basis regardless whether the misconduct was minor or not.
It will be very interesting to see whether German case law will change in the future and make room for a more ‘fair and reasonable’ approach. In any event, Aldi Australia has already found out that ‘Case Emmely’ also applies in the new world…
Narwal v Aldi Food Stores Limited was reported here:
More on dismissals under German law:
More on ALDI:
and more on Emmely: