Termination during the notice period after resignation: Is it unfair?

The Fair Work Commission (FWC) recently dealt with a case where a worker claimed unfair dismissal after his employer terminated him during his notice period.

The worker argued he was performing his duties as usual and denied allegations of misconduct, while the employer maintained they were justified in ending his employment early.

The case raised significant questions about employee rights during notice periods, the difference between resignation and dismissal, and how small businesses should handle performance issues.

Resignation with a notice period

The situation involved a head chef at a hotel who, on 2 September 2024, submitted his resignation with a notice period until 2 October 2024.

Four days after receiving the resignation, the employer dismissed him with one week's notice, claiming he wasn't performing his duties, had taken company property, and made threats against the business.

The worker strongly denied these allegations, explaining he was still doing his job during the notice period and had only taken his personal kitchen equipment, including knives and a mandolin.

He argued there was no valid reason for the early termination of his employment.

When responding to the unfair dismissal claim, the employer first tried to argue they hadn't actually dismissed the worker but had simply shortened his notice period.

The Commission rejected this argument, stating "[only the worker] could bring forward his own notice period... It was terminated on [the employer's] initiative and was therefore a dismissal."

Factors influencing the dismissal process

A key aspect of the case involved determining the worker's length of service. Though he started with the current employer in November 2023, the Commission found his previous service with the old business owner counted towards his employment period due to transfer of business rules.

The Commission confirmed the hotel qualified as a small business with 14 employees, including regular casual staff. This meant the Small Business Fair Dismissal Code applied, but the Commission found the employer failed to comply with the Code's requirements for fair dismissal.

"[The employer] did not believe that the conduct was sufficiently serious to justify immediate dismissal... In order to have reasonable grounds for believing that summary dismissal was justified, [the employer] would have needed to investigate the allegations further before rejecting his denials," the Commission explained.

Dismissal during the notice period

The Commission found no substantial evidence supporting the employer's claims about poor performance or misconduct.

While the manager said she had discussed concerns about long wait times with the worker, these conversations never included any warnings about possible dismissal.

"[The employer] put its concerns to [the worker], but it did not tell him that his employment was at risk," the Commission noted.

The decision emphasised that "taking into account all of the circumstances... the dismissal was harsh because there was no substantiated reason for it."

After calculating the lost earnings between the early termination (13 September 2024) and when the resignation would have taken effect (2 October 2024), and deducting income from new employment, the Commission ordered compensation of $1,301.94 plus 11.5% superannuation.