Worker argues company failed to follow proper dismissal procedures
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who was summarily dismissed after seven years of employment.
The case centred on allegations of serious misconduct, including workplace bullying, timesheet fraud, and unauthorised use of company resources.
The worker argued that he was dismissed without proper procedural fairness and that many of the serious allegations against him were never actually raised during the dismissal meetings.
He maintained that his outside work was disclosed to management and that his employment contract did not prohibit such activities. The worker also disputed claims about timesheet irregularities and workplace bullying, arguing that he was denied any opportunity to respond to the allegations before his dismissal.
The worker started employment as a leading hand carpenter in July 2017 with a construction company. He entered into a fixed-term contract in July 2022 earning $40.75 per hour plus superannuation and use of a company vehicle.
The employer had treated the worker favourably throughout his employment, providing multiple pay rises and additional benefits over seven years.
In December 2023, the employer agreed to contract amendments providing the worker with a $2,000 bonus instead of a requested wage increase and waiving a $1,250 debt.
The contract reinforced the worker's expanded responsibilities including "contacting other building companies to arrange and schedule any required works if we are too quiet to keep all carpentry staff busy and adding financial value."
The employer's director started a comprehensive business review in September 2024 due to financial underperformance and reports of workplace conflict.
The review revealed that the carpentry division's total income from January to October 2024 was less than the team's wage costs.
The situation escalated in January 2025 when the director discovered an Instagram post, showing the worker and another employee wearing the company's shirts.
The director arranged a meeting with the worker on 10 February 2025, raising concerns about the carpentry division's underperformance, timesheet discrepancies, and questioning whether the worker was working for other companies.
The worker acknowledged the outside work but downplayed it as weekend cash jobs, also stating he had multiple job offers and wanted a pay rise.
Initially, the director agreed to a six-week notice period, sending an email stating: "As discussed with you, it has been decided that your employment will continue for the next 6 weeks and then we agree to amicably part ways. Your last day will be Friday 21 March 2025." The worker responded positively, saying he was happy to do the six weeks.
However, this arrangement quickly changed when additional allegations emerged between 10-11 February. The director received phone calls from staff members reporting the worker's alleged bullying behaviour.
One employee reported feeling intimidated and bullied, stating there were multiple altercations that included the worker damaging his power tools and batteries.
Other employees confirmed witnessing abusive behaviour, and one worker resigned, citing ill-treatment.
The FWC examined whether the dismissal complied with the Small Business Fair Dismissal Code, which applies to employers with fewer than 15 employees.
The Code permits summary dismissal when employers believe on reasonable grounds that employee conduct is sufficiently serious to justify immediate dismissal.
The Commission applied the two-step test from Pinawin v Domingo, requiring both a genuine belief and reasonable grounds.
The director arranged another meeting on 12 February 2025, attended by the construction manager. During this meeting, he advised the worker that he had conducted further investigation into allegations of timesheet irregularities and received multiple complaints about misconduct.
The worker was then advised that these breaches constituted serious misconduct warranting immediate termination.
The termination email outlined multiple allegations including "verbal abuse and bullying of junior employees that were under your leadership and supervision" and "defrauded the business by claiming and being paid for overtime work that was not completed."
The worker argued that most of these specific allegations were never actually raised during either meeting, preventing him from responding.
When examining whether valid reasons existed for dismissal, the FWC scrutinised each allegation. Regarding the bullying and harassment allegations, the Commission found the evidence insufficient.
No direct witnesses were called to give evidence, and the director's conversations with employees were described as being in "vague and non-specific terms."
The construction manager who attended the dismissal meeting could not recall detailed allegations about bullying conduct.
He agreed that "it would have been difficult for [the worker] to respond to the matters relied on by [the employer] in dismissing [the worker] given the absence of any specific details being provided to him during the 12 February Meeting."
For the timesheet fraud allegations, the FWC found the evidence problematic. The company's bookkeeper confirmed that her Time Sheet Summary analysis was completed several weeks after the worker's dismissal.
The FWC stated it was "unable to accept that evidence as confirming misconduct on [the worker's] part" due to inability to assess the source data's accuracy and reliability.
The Commission noted: "It was not possible for [the worker] to respond to the timekeeping fraud allegations levelled at him in the 12 February 2025 termination email for two reasons. Firstly, the full data analysis was not compiled until 3 months after his dismissal."
Regarding the outside work for certain projects, the worker had actually disclosed this activity to the director in December 2024 through text messages, referring to "cash work" after hours for another builder. The director was aware of the outside work and chose not to pursue it further at that time.
The FWC examined whether this work breached the employment contract. The employer pointed to a definition of "Restricted Activities" involving canvassing or soliciting orders from clients. However, the Commission found this definition applied only to post-employment restrictions, not during employment.
The worker acknowledged he may have used his company vehicle when undertaking work for the outside project.
The FWC found this constituted a breach of the Company Vehicle Policy but concluded this misconduct was not sufficiently serious to establish a valid reason for dismissal, noting that "a formal warning would in my view have been the appropriate sanction."
The FWC found serious procedural failures throughout the dismissal process. The director admitted during cross-examination that he had already decided to dismiss the worker before the 12 February meeting.
This meant the worker was not given a genuine opportunity to respond to the allegations before the dismissal decision was made.
The Commission noted the established legal principle that "in order to hold a belief on reasonable grounds it will normally be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee."
However, the FWC found that specific details of most misconduct allegations were not actually discussed during the meeting.
The director also admitted that details of the misconduct allegations were not properly put to the worker. The Commission noted: "Specifically, no additional examples of alleged time sheet discrepancies were provided. Nor was the alleged breach of the Company Vehicle Policy raised, and no details of the alleged bullying, harassment or threats directed to junior staff were provided."
Finding the dismissal unfair, the FWC ordered compensation of $7,335 gross. The worker's anticipated employment period was limited to six weeks, as the employer subsequently closed the carpentry division for financial reasons, making all remaining carpenters redundant within that timeframe.
The FWC applied a 25% reduction for the worker's misconduct regarding unauthorised vehicle use, explaining:
"While that misconduct was not sufficiently serious to establish a valid reason for his dismissal I am satisfied that the misconduct contributed to the employer's decision to dismiss him."
The decision concluded: "I have considered and determined that [the worker's] dismissal was not consistent with the Code, was unjust, unreasonable and thereby unfair. I am further satisfied that reinstatement would be inappropriate and that an award of compensation is appropriate."
