Fair Work Commission|2025-06-17

Andrew Cox v Hill And Muller Pty Ltd [2025] FWC 1653 (17 June 2025)

s.394 - Unfair dismissal

Application for an unfair dismissal remedy - jurisdictional objections raised - whether Applicant's dismissal consistent with Small Business Fair Dismissal Code - jurisdictional objections dismissed - dismissal found to be unfair - reinstatement not appropriate - compensation ordered.

[1] This decision concerns an application made by Mr Andrew Cox (the Applicant) for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 Cth (the Act). The Applicant was employed by Hill and Muller Pty Ltd (the Respondent) and alleges he was dismissed on 12 February 2025. The unfair dismissal application was lodged by the Applicant on 13 February 2025. On 27 February 2025, the Respondent filed its Form F3 response to the unfair dismissal application in which it raised a jurisdictional objection to the application, that being, it had complied with the Small Business Fair Dismissal Code (the Code) in dismissing the Applicant.

[2] The matter was listed for determinative conference/hearing before me on 10 June 2025 to deal with both the jurisdictional objection and the merits of the application. Both parties filed material in advance of the determinative conference/hearing in accordance with directions issued. The Applicant appeared and gave evidence while Andrew French (Director) appeared on behalf of the Respondent, gave evidence and also called Ms Rupali Hiremath (Accounts/Bookkeeping) and Justin Koob (Construction Manager) to give evidence.

[3] The Applicant commenced employment with the Respondent as a Leading Hand Carpenter on 17 July 2017. He entered into a further contract of employment on 26 July 2022[1] (2022 Contract) for a fixed term of two years on an employment package that included a base hourly rate of pay of $40.75 ($1630 per week) plus superannuation and use of a company vehicle.

[4] On 11 December 2023, the Respondent agreed to amend the 2022 Contract by providing the Applicant with $2,000 bonus in lieu of a requested wage increase.[2] The Respondent also agreed to waive a $1,250 debt owed by the Applicant and to provide him with new ladders up to the value of $2,000. In amending the 2022 Contract, the Respondent reinforced its expectation of the Applicant in the following terms;

- 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.

- Requesting and receipting PO's for all work and tasks before commencing.

- Working with Cam to help him slowly become more independent and manage his own crew on day to day basis.

- QA of all works being completed by our carpenters."[3]

[5] A request by the Applicant for a remuneration review on 13 February 2024 was declined by the Respondent.[4]

[6] The 2022 Contract provided for the provision of a company vehicle for the Applicant's use, relevantly stating as follows;

"4.4 The employee will also be entitled to the use of a company car (dual cab ute) during their employment and the associated benefits of a fuel card and Toll's registration. Whilst in possession of the company vehicle the employee will be liable for any fines or breaches of law in the vehicle and the employee will be liable to pay any insurance excess fees in the event of an accident, theft or other event."

[7] The obligations of employees in respect of the care for company vehicles was addressed by Mr French in a meeting on 23 September 2024. Following that meeting, the Applicant signed off on the Company Vehicle Policy.[5] The policy relevantly provided for the following;

- Company vehicle must be only driven by the employee registered to the vehicle.
- The employee may use the vehicle for personal use on weekends and outside company work hours for short trips.
- For long distance trips and personal travel, the employee must pay for their own fuel.
- The employer, at its discretion, can revoke an employees' use of company vehicle at any time and for any reason and may provide an alternate vehicle to accommodate the business' requirements.
- Employees using a company vehicle may be requested to maintain an up to date log book and make entries in the log book for each occasion of travel,
- Company branding applied to the vehicle is at the employers sole discretion. No third party signage, stickers banners or a like is to be applied to the vehicle at anytime.
- The employee is obligated to keep the vehicle clean and tidy inside and out during their possession of the vehicle.
- Routine cleaning of the vehicle is the employees responsibility.
- Not smoke/vape in or near a company vehicle.
- Not consume or transport alcohol in the company vehicle during or outside working hours. This includes transportation of sealed alcoholic containers.

- The employee is responsible for returning the vehicle in the same condition as received.
- The vehicle should be returned, free from any significant damage. It is the responsibility of the employee to repair any damage to the vehicle or pay the Employers Insurance Excess for the repair of vehicle. Each separate defect or damage may incur a separate Insurance Excess Premium charge.
- The employee will wash the exterior and clean the interior prior to returning the vehicle to the employer on completion of their employment or when exchanging the vehicle for new company vehicle. If the vehicle is not returned to the employer in a clean and presentable condition, the employer at its discretion will have the interior and/or exterior professionally cleaned and the employee will be liable for the cost. Interior clean and detail cost $250, Exterior clean and detail cost $250.

[8] The motor vehicle insurance policy[6] held by the Respondent for the vehicle used by the Applicant identified him as the nominated driver and provided for an excess payment in the case of an insurance claim of $2,300.

[9] Mr French gave evidence that he treated the Applicant highly favourably during his employment and referred to the following;

multiple pay rises passed on to the Applicant over the past seven years;
during the Applicant's first six months of employment, the Respondent purchased a tandem trailer for the Applicant to use for personal use;
the Respondent kept the Applicant's role open during a period when he was off work for an extended period due to a non-work related hand injury;
the Respondent renegotiated and agreed to changes to the Applicant's conditions of employment in December 2023, including payment of the $2,000 bonus, waiving of a debt owed to the Respondent and provision of new ladders to the Applicant; and
provision of extended leave during 2023 to allow the Applicant to deal with traumatic family events as well as paying for the Applicant's attendance at psychologist appointments.

[10] Mr French points to an incident of the Applicant's misconduct which took place on 25 July 2019 during which the Applicant was found to have pointed a nail gun near the head of another employee. The incident led to the issuing of an 'Employee Direction'[7] in which the Applicant's conduct was found to have been inappropriate and unacceptable. The 'Employee Direction' was issued to the Applicant as a 'first and final warning'. The Applicant, along with other employees, was warned in an email from Mr French on 28 January 2021[8] regarding use of and damage to tools. In the email Mr French warned staff that if employees blatantly disrespected other employees' property and he had to step in to resolve the matter, extreme cases might result in termination of employment[9].

[11] Mr French states that in September 2024 he commenced a comprehensive review of the Respondent's carpentry business for two reasons, his concern that it was under performing in a financial sense and due to reports he had received of conflict and mismanagement within the team. The review commenced with a request on 5 September 2024[10] for the Applicant to complete and return performance reviews for each of the team members under his supervision. Despite following up with the Applicant on 25 & 30 September 2025, the Applicant did not return the completed reviews until 4 October 2025 according to Mr French. Mr French says he then spoke with each of the employees in relation to their performance reviews in the October/November 2024 period. He says that arising from those discussions, while the majority of feedback he received in relation to the Applicant was positive, he was left with an apprehension that there was an underlying issue in the team that no one wanted to speak about.

[12] On 3 December 2024, Mr French sent an email[11] to the Applicant attached to which was a spreadsheet documenting every Purchase Order (PO) and all revenue for works completed by the carpentry team from January - October 2024. The Applicant was requested to review it as it appeared to Mr French that there must be missing work and POs. Mr French notes that the total income for the period was less than the carpentry team's wages cost for the same period. The Applicant responded on 18 December 2024[12] with some amendments and corrections. Further exchanges between the two men on the POs took place in early January 2025. Mr French states that compiling this information was important for him to review the total income/revenue of the carpentry business.

[13] Mr French went on to explain that at times it was necessary to sub-contract the Respondent's team of carpenters to other builders when the Respondent had insufficient work of its own. The process followed was that the Applicant would first talk to other builders to confirm whether there were any jobs available and if so, a PO would be sent through to the Applicant and then to Mr French for review and approval. Some examples of sub-contracted works from 2024 were provided in emails exchanged between the Applicant and Mr French.[13] Mr French further states that he was aware of the sub-contracting and completion of works on seven occasions with Hermitage Homes during 2024. The Applicant confirmed the sub-contracting process described by Mr French.

[14] Mr French states that in or around January 2025 he became aware of an Instagram post by a company called Blue Ladder Projects dated 21 November 2024[14] in which the Applicant and another employee of the Respondent, Michael Mulligan, were pictured posing in Blue Ladder Projects shirts in front of a Blue Ladder Projects sign. The post included the caption, "Big news at Blue Ladder Projects - Andy and Michael have joined the crew! We promise they're not just here for the free coffee. Excited to have them on board and can't wait to see the magic they'll bring!" Mr French states that he was not aware of the Applicant working for another company and he was not advised by the Applicant of the opportunity for the Respondent to sub-contract to Blue Ladder Projects. Nor did the Applicant provide any update regarding outstanding POs for sub-contracted works to Blue Ladder Projects following Mr French's email to the Applicant on 3 December 2024 in which Mr French had asked the Applicant to review and update the list of PO's provided.

[15] Mr French states that on becoming aware of the Instagram post he commenced an investigation and first spoke with Cameron Schuyt, Michael Mulligan and Jack Noisette. He states they each confirmed they had been working for the Applicant who had been contracting directly to Blue Ladder Projects and that they had been receiving payments directly from the Applicant for that work. Each of the three employees expressed remorse according to Mr French, agreed that the work and payments were inappropriate and should not have taken place. They also confirmed that by the end of January 2025 they had ceased work for the Applicant and Blue Ladder Projects.

[16] Mr French met with the Applicant on 10 February 2025 (10 February Meeting) at the Respondent's offices in Mont Albert. During the meeting, he says the following matters were discussed;

information regarding the performance of the carpentry division and that it was underperforming;
discrepancies in the Applicant's time sheets;
the Applicant was asked whether he was working for other Companies to which he responded by downplaying it as a weekend cash job; and
the Applicant stated that he had multiple offers from other builders and wanted a pay rise.

[17] Mr French states that during the meeting he lost trust and faith in the Applicant due to his dishonesty. He says it was then agreed that the Applicant would work for the Respondent for a further six weeks. An email confirming this was subsequently sent by Mr French to the Applicant on 10 February 2025[15] in the following terms;

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.

During this time, it is agreed that you will abide with the following:

- Any work for other building companies or other employers during work hours or after work hours will be confirmed with me in advance. Approval at my discretion.

- Not request or utilise any of our employees for any work other than our companies work.

- Maintain professional and respectful communication and demeanour, with all staff, contractors, suppliers and clients.

- No slander directed towards the business, employees or myself etc.

- Along with all other aspects and parameters of your previous employment contracts.

Once you have had a think about what your next steps will be, please let me know and I can send out communication to everyone in the business. I will be happy to provide support in anyway I can, once you know what the next steps are. Let's have a chat again in the next few days.

Thanks for all the great work and homes you have built over your time employed with us."

[18] The Applicant responded shortly after receiving the above email on 10 February 2025[16] in the following terms;

I'm happy to do the 6 weeks. I will continue to do my best work during this period and 'head down bum up'.

Could you please let me know if there is a payout figure and if so how much?

These two are crucial for setting up the next chapter."

[19] The Applicant states the only matters raised with him during the 10 February Meeting were the carpentry team's financial performance and his work for Blue Ladder Projects, a matter he says he had previously raised with Mr French. He states further that the only reason given to him in the meeting on 10 February 2025 for his dismissal was his after-hours work for Blue Ladder Projects. He further states that Mr French asked him to advise employees that he had resigned, a request he says he was uncomfortable with given his close relationship with the other employees.

[20] When cross-examined on the 10 February 2025 meeting, the Applicant confirmed that he had a few days' notice of the meeting which was organised by Mr French in response to the Applicant's request for a performance review discussion. As the meeting developed however, he felt that he was ambushed by Mr French raising the out of hours work he performed for Blue Ladder Projects. He confirmed that he did not at any time request a support person during the meeting. In relation to the work for Blue Ladder Projects, the Applicant referred to a text message exchange with Mr French on 11 December 2024[17] in which he disclosed to Mr French that he and some of the other employees of the Respondent were doing 'cash work' after hours for another builder. He agreed that he received cash from Blue Ladder Projects for that work and disbursed it to the other employees involved. He did not disclose to Mr French at that time the name of the builder he was doing the 'cash work' for despite Mr French requesting that information in the text message exchange on 11 December 2025.

[21] The Applicant also agreed that while the nature of the work he undertook for Blue Ladder Projects was similar to the work he undertook for the Respondent, it only involved a couple of hours of an evening from time to time. The Applicant was adamant that he was dismissed by Mr French at the conclusion of the 10 February Meeting contrary to the statement in Mr French's 10 February 2025 email referring to an agreed amicable separation.

[22] The Applicant also confirmed during cross-examination that part of his responsibilities included trying to secure additional work with other builders for the Respondent's carpentry team when there was insufficient in-house work for the team. He conceded that he had not brought the Blue Ladder Project work to Mr French's attention because there was sufficient in-house work for the carpentry team at the time. He rejected that any of the work performed for Blue Ladder Projects was undertaken at a time when he was being paid by the Respondent but conceded that he may have used his company vehicle when undertaking this work for Blue Ladder Projects. He maintained that his employment contract did not preclude him from performing out of hours work for another employer.

[23] On 10 February 2025 while driving home after work, Mr French states he received a phone call from Mr Mulligan during which Mr Mulligan reported feeling intimidated and bullied by the Applicant during the preceding few weeks. According to Mr French, Mr Mulligan stated there were multiple altercations between he and the Applicant which had included the Applicant damaging power tools and batteries owned by Mr Mulligan. Mr Mulligan also said that he was considering resigning if he could not feel safe at work. Mr French says he then spoke with other employees Cameron Schuyt and Victoria Coghlan who also confirmed they had witnessed bullying and abusive behaviour of the Applicant towards Mr Mulligan and Jack Noisette. Mr Noisette subsequently tendered his resignation after work on 11 February 2025 and in doing so voiced concern that he had been ill-treated by the Applicant in recent months. According to Mr French, this resignation brought to three the number of employees who had either signalled their resignation intention or actually resigned in the space of a few weeks. Mr French did not regard this as mere coincidence and believed there were underlying issues with the Applicant and his management of the carpentry team.

[24] Mr French says in his witness statement that in the period 10-11 February 2025 he completed a review of the Applicant's timesheets and cross-checked those records with vehicle toll transactions and fuel card transactions. The data was reflected in a Time Sheet Summary[18] prepared by the Respondent's Bookkeeper Ms Hiremath which revealed twenty instances where the Applicant claimed payment for hours worked in circumstances where the toll transaction or fuel transaction data revealed the Applicant could not have been at work at the time claimed. The data also revealed that on two occasions, the Applicant used the company vehicle assigned to him for extensive personal travel, which Mr French claimed was contrary to the Company Vehicle Policy[19].

[25] When questioned on the preparation of the Time Sheet Summary, Ms Hiremath confirmed that she completed her analysis and preparation of the summary at the request of Mr French several weeks after the Applicant's dismissal and immediately prior to the Respondent's material being filed with the Commission in this matter. She accepted that the Time Sheet Summary took approximately two days to complete and was not made available to the Applicant to respond to prior to his dismissal. She also confirmed that Mr French also had access to the time sheet records but was unsure if he had access to the toll or fuel transaction data that she used to complete her analysis of the Applicant's time keeping.

[26] When cross-examined on the preparation of the Time Sheet Summary, Mr French accepted that the full analysis was not completed by Mr Hiremath until after the Applicant's dismissal. He maintained however that he did his own high-level review as part of his business review that he initiated in September 2024 and that some of the discrepancies he uncovered through that review fed into his discussions with the Applicant on 10 and 12 February 2025. He maintained that he provided at least one discrepancy to the Applicant during the 10 February 2025 meeting. The Applicant denied the matter was raised in the 10 February Meeting.

[27] After conducting the above-referred review of the Applicant's timesheets and speaking with other employees, Mr French states he formed the view that the Applicant had been in breach of his employment contract and had engaged in serious misconduct. This prompted Mr French to arrange a further meeting with the Applicant on 12 February 2025 (12 February Meeting) to which Justin Koob also attended. Mr French says he advised the Applicant during the meeting that he had conducted a further investigation into allegations of the Applicant defrauding the business by way of timesheet irregularities. He states he also advised the Applicant that he had received multiple complaints in the preceding two days about his misconduct. The Applicant was then advised that these breaches were considered serious misconduct that warranted immediate termination of employment. An email confirming termination of the Applicant's employment was sent to him by Mr French on the same day in the following terms;

I am writing to you about the termination of your employment with Hill and Muller Pty Ltd T/A Advanced Living.

I refer to our meeting on 12/02/2025, 7am at our office which was attended by you and Justin Koob. During the meeting we discussed the reason for terminating your employment and sighted serious misconduct.

Reasons for the termination include, but not limited to:

- Verbal abuse and bullying of junior employees that were under your leadership and supervision.
- Damage to property of employees.
- Physical threats to employees.
- Defrauded the business by claiming and being paid for overtime work that was not completed.
- Defrauded the business by submitting time sheets and being paid for regular work hours not completed by the employee.
- Defrauded the business by utilising company fuel card for personal travel.
- Defrauded the business by canvassing and soliciting employees of the business, along with utilising business equipment and vehicles. By directly sub-contracting works not approved or notified to the business for personal financial gain.
- Transported open and sealed containers of alcohol in company vehicle.

As discussed during the meeting, your conduct during these incidents:

Caused a serious and imminent risk to the health or safety of a person/s.

- Was wilful or deliberate behaviour by you that is inconsistent with the continuation of your contract of employment.
- Caused a serious and imminent risk to the reputation, viability or profitability of the Employer's business.
- Was conduct in the course of your employment engaging in fraud.

We consider that your actions constitute serious misconduct warranting summary dismissal.

You will be paid your accrued entitlements and any outstanding pay up to and including your last day of employment. This includes the balance of any annual leave, superannuation and Coinvest (Long Service contribution).

If you have been paid annual leave in advance, any amount still owing will be deducted from your final pay.

You may seek information about minimum terms and conditions of employment from the Fair Work

Ombudsman. If you wish to contact them you can call 13 13 94 or visit their website at

www.fairwork.gov.au. Some termination payments may give rise to waiting periods for any applicable Centrelink payments.

If you need to lodge a claim for payment you should contact Centrelink immediately to find out if there is a waiting period.

[28] The Applicant was informed at the conclusion of the meeting that as the dismissal took immediate effect, he was required to immediately return the motor vehicle along with the fuel card and Bunnings card. The Applicant's request to drive the vehicle and trailer home to drop off his tools and equipment was rejected by Mr French who says he did offer alternate arrangements to transport the Applicant home. These were declined by the Applicant according to Mr French. Mr French and Mr Koob then walked to the vehicle with the Applicant and supervised him while he removed his tools and equipment from the vehicle. The Applicant along with his tools and equipment was subsequently picked up by a family member.

[29] The Applicant states that the only further matter raised with him during the 12 February Meeting was that of an unspecified complaint made by an unidentified employee that was alleged to have occurred in 2024. The Applicant says he was not advised by Mr French of who had made the complaint or the details of the complaint. He further rejects that the other matters raised in the notice of termination were raised with him during either of the meetings on 10 or 12 February 2025. The Applicant specifically states the following in relation to the allegations set out in the notice of termination, the;

allegations of alleged bullying and harassment of other staff was never raised with him prior to his dismissal and that he enjoyed a good relationship with all employees;

allegations of damaging other employees' property was not raised with him prior to his dismissal;

allegations of physical threats directed to other employees was not raised with him prior to his dismissal;

allegations of timesheet fraud was not raised with him prior to his dismissal;

allegation of defrauding the company by using the company vehicle for extensive personal use was rejected on the basis that the policy allowed for the use of the vehicle for personal use on the weekends and outside company hours for short trips; and

allegation he had consumed alcohol whilst driving the company vehicle was not put to him and in any case he rejected the allegation.

[30] When cross-examined on the matters raised in the 12 February 2025 termination email, the Applicant agreed that he had signed and agreed to the Company Vehicle Policy and that use of the company vehicle by him was confined to business and limited personal trips. He understood that interstate trips were not covered and would have to be paid for by himself. He confirmed that he had regularly used his motor vehicle to drive down to Torquay where he had family and that he had not sought approval from Mr French to use the company fuel card for his private travel to Rutherglen. When asked during cross-examination to respond to the claimed time sheet discrepancies, the Applicant said he was unable to respond as he did not have access to his work emails or to the timesheets, fuel and toll transaction data relied on by the Respondent. He categorically denied having claimed payment for hours not worked.

[31] As regards the allegation of canvassing and soliciting employees of the business along with utilising business equipment and vehicles when doing the out of hours work, the Applicant rejects it on the following basis. He states he made Mr French aware of his second job before Christmas 2024 and that Mr French well knew that the Applicant needed a second job to make ends meet while his wife was off work on maternity leave. He further claims that such work was not prohibited by his contract of employment, that he only undertook extra work outside his ordinary hours of work and primarily used his own tools, which were supplemented by Blue Ladder Projects.

[32] When Mr Koob was cross-examined on the 12 February Meeting, he could not recall the matters referred to by Mr French in the 12 February 2025 termination email. Specifically, he could not recall any detailed allegations regarding the alleged bullying, harassing and threatening conduct directed by the Applicant towards junior staff. He confirmed these allegations were only raised in vague and generalised terms during the meeting. He agreed that no details were provided to the Applicant on the complainants, the timing or nature of alleged misconduct. Mr Koob conceded that it would have been difficult for the Applicant to respond to the matters relied on by the Respondent in dismissing the Applicant given the absence of any specific details being provided to him during the 12 February Meeting.

[33] When cross-examined on the 12 February Meeting, Mr French also agreed that details of the misconduct allegations were not put to the Applicant. 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. When pressed, Mr French conceded that the decision to dismiss the Applicant was taken by him prior to the 12 February Meeting after he had spoken with staff regarding the Applicant's behaviour towards them. He stated that he formed the view that such conduct along with other matters relied upon constituted serious misconduct. He conceded that the Applicant was not notified of the reasons for his dismissal prior to the decision having been made and nor was he given an opportunity to respond to the matters relied upon by the Respondent.

[34] The Applicant received payment on termination including pay for ordinary hours worked up to the date of termination and any accrued leave entitlements. Having been summarily dismissed he did not receive any pay in lieu of notice. The Applicant states that after unsuccessful efforts to secure alternate employment following his dismissal he set himself up as a 'sole trader' in late March 2025 and now sub-contracts to building companies. He estimates his earnings from this sub-contract work as being approximately $12,000 up to the date of filing his submissions on 20 May 2025.

[35] Shortly after the Applicant's termination of employment, Mr French met with remaining staff in the carpentry team and advised them that with the Applicant's departure, he had decided to close the Respondent's carpentry business. The rational provided to staff for this decision was that without a person capable of filling the Leading Hand role, Mr French was unable to guarantee the safety, wellbeing and ongoing training of members of the carpentry team. Mr French says he then spoke with each of the employees individually and provided them with the relevant period of notice based on their length of service and employment contract. This resulted in the remaining members of the carpentry team, which numbered five, ceasing their employment over the six-week period following the Applicant's dismissal.

[36] When questioned on the rationale provided to employees, Mr French conceded that the key driver was not the Applicant's dismissal. Rather, it was the cost of maintaining an in-house team of carpenters was not financially sound and the Applicant's departure confirmed and accelerated his decision. He explained that engaging carpenters on a sub-contract basis rather than by direct employment had a significant positive financial benefit for the company in that it reduced the costs of construction by an estimated amount of $100,000 per annum. Mr French confirmed that had the Applicant not been dismissed he would have nonetheless proceeded with the dismissal of the carpentry team on financial grounds.

[37] A threshold issue to be determined in this matter is whether the Applicant has been dismissed from his employment. The circumstances in which a person is taken to be "dismissed" are set out in s 386 of the Act. Section 386(1) relevantly provides as follows:

(a) the person's employment with his or her employer has been terminated on the employer's initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[38] Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant. There was no dispute, and I find that the Applicant's employment with the Respondent terminated at the initiative of the Respondent.

[39] Having found that the Applicant was dismissed with the meaning of s 386(1) of the Act, I am now obliged under section 396 of the Act, to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; and

(d) whether the dismissal was a case of genuine redundancy.

[40] Relevant to the determination of the preliminary matters I am satisfied that;

The Applicant was dismissed on 12 February 2025 and filed his unfair dismissal application on 13 February 2025, that latter date being within 21 days of the date of his dismissal;

The Applicant commenced employment with the Respondent on 17 July 2017 and at the time of his dismissal had been employed for a period of over seven years, that period being more than the minimum employment period of either six months or twelve months in the case of a small business employer;

The Applicant's annual base salary was approximately $85,000, on top of which he received superannuation contributions and use of a company supplied motor vehicle for business and personal use. His remuneration fell below the high-income threshold; and

The Applicant was not dismissed due to the Respondent no longer requiring the Applicant's job to be performed by anyone because of changes in the operational requirements of the Respondent's enterprise.

[41] Having considered each of the initial matters, I am satisfied that the application was made within the required period in s 394(2), the Applicant was a person protected from unfair dismissal and the dismissal was not a genuine redundancy. However, at the time of the Applicant's dismissal the Respondent claims that it employed fourteen employees and was a small business employer within the meaning of s 23 of the Act. I am consequently required to determine whether the Respondent was a small business employer and if so whether the Applicant's dismissal was consistent with the Code. It is to that I now turn.

[42] It was uncontested by the Applicant, and I accept that the Respondent had less than 15 employees at the time of the Applicant's dismissal taking into account associated entities. It follows that the Respondent was a small business employer (as defined in s 23 of the Act) for the purposes of ss 386(1) & 388(1) of the Act. The Code declared by the Minister pursuant to s 388(1) of the Act applies to small business employers with less than 15 employees and relevantly provides as follows:

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements."

[43] Relevantly to the present case, the Full Bench in Pinawin v Domingo[21] considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:

"[29] ... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee's conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in

relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned.

[38] Normally in order to hold a belief on reasonable grounds it will 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. We are concerned in this case that no discussions took place about the implications of Mr Domingo's conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well ..."

[44] I have found above that the Applicant was dismissed with immediate effect on 12 February 2025 by the Respondent. The Respondent submits that the Applicant should have been aware that his employment was at risk but accepts that the Applicant was not warned or put on notice that his employment was at risk prior to the dismissal. It follows therefore that the second limb of the Code, that of dealing with "Other Dismissal", is not relevant. Consequently, my role in this matter is to determine whether the employer genuinely held a belief that the employee had committed an act of serious misconduct and whether that belief was, objectively speaking, based on reasonable grounds. It is not necessary to determine whether the serious misconduct did in fact occur or that the employer was correct in the belief that it held.

[45] There is a dispute over whether the Applicant was dismissed during the 10 February Meeting with the Applicant contending that he was dismissed with six weeks' notice while the Respondent argues that an amicable separation was agreed. It is unnecessary for me to resolve the evidentiary conflict as any doubt about the dismissal of the Applicant was removed when the Applicant was summarily dismissed on 12 February 2025.

[46] Mr French contends that at the time of the Applicant's dismissal; he held a genuine belief that the Applicant's conduct was sufficiently serious to justify his immediate dismissal. He pointed to the Applicants cumulative conduct of sub-contracting to another employer in breach of his 2022 Contract, time keeping fraud, use of the company motor vehicle for unauthorised private use, verbal abuse, harassment and threatening of more junior staff, and damaging property of other staff. It was the latter allegations of abusing, bullying and threatening other staff that caused Mr French to act decisively. He spoke of his concern at the health and safety risks to other staff had he not acted to remove the Applicant from the workplace. Mr French also submits that the Applicant's failure to acknowledge or respond honestly to the matters raised with him in the 10 February Meeting contributed to the dismissal decision he took.

[47] I accept that Mr French held a genuine belief that the Applicant's conduct was sufficiently serious to justify his immediate dismissal. Having made that finding it is now necessary for to me to determine whether Mr French's belief was based on reasonable grounds which includes whether Mr French carried out a reasonable investigation. As the Respondent seeks to rely on the cumulative conduct it is necessary for me to consider each of the matters relied on in the termination email on 12 February 2025.

[48] In relation to the Applicant's work for Blue Ladder Projects, the evidence reveals that the Applicant alerted Mr French to he and his colleagues after hours cash work. While the Applicant did not disclose the name of builder, Mr French was aware from 11 December 2025 of the Applicant's after hours work and elected to make no further enquiries at that point. Had Mr French been so concerned about that activity one would have expected him to pursue it with the Applicant at the time. It was not until January 2025 when the Instagram post was brought to Mr French's attention that he was roused to action. He raised the matter with the Applicant during the 10 February Meeting but even then, he did not believe the conduct warranted immediate dismissal based on his evidence that an amicable separation was agreed.

[49] It is somewhat disingenuous for Mr French to argue that the Applicant's conduct in doing out of hours work for Blue Ladders Project supported his summary dismissal on 12 February 2025 when Mr French had raised the issue with the Applicant on 10 February 2025 and at that point was clearly of the view that the conduct did not justify summary dismissal. The further point to be made is that the Respondent now seeks to rely on the conduct being in breach of the 2022 Contract. I was not taken too or able to identify any clause in that agreement that proscribed such conduct. In any case, there was no evidence that the alleged breach of the 2022 Contract was raised at either the 10 or 12 February Meetings. Reliance on this conduct of the Applicant does not provide a reasonable ground for Mr French's belief that immediate dismissal was warranted.

[50] It is convenient to deal together with several of the grounds relied on by the Responded to dismiss the Applicant. Those grounds are the verbal abuse, bullying and physical threats directed towards junior employees as well damaging other employees' property. These grounds related to conversations Mr French says he held on 10 & 11 February 2025 with staff that worked under the Applicant's direction and supervision. The short point is that no specific allegations were raised with the Applicant during the 10 & 12 February Meetings in respect to any of these matters going to when, who and what conduct occurred. Putting aside the fact that Mr French had already decided to dismiss the Applicant prior to that meeting, the Applicant was in no position to respond to a vague and non-specific allegations that were raised during the 12 February Meeting.

[51] As stated by a Full Bench of the Commission in Pinawin v Domingo, in order to hold a belief on reasonable grounds it will normally be necessary to discuss the allegations with an employee and take into account the employee's responses. While that requirement may not apply in all cases, this is not such a case. It was incumbent on the Respondent to have sought an explanation from the Applicant in relation to what are on their face, extremely serious allegations. It did not do so and as such the belief that the alleged abusive, bullying and threatening conduct was sufficiently serious to justify immediate dismissal was not based on reasonable grounds.

[52] As regards the timekeeping fraud allegations, Mr French says he raised one example in the 10 February Meeting, a point denied by the Applicant. Mr French conceded that in any event, further examples were not raised in the 12 February Meeting although he claimed that by his own review of the timesheets, fuel and tolling transaction data, there were several examples that could have but were not to the Applicant. It is clear enough from Ms Hiremath's evidence that the full analysis of the relevant data was not completed until shortly before the Respondent filed its material in this case, some three months after the Applicant's dismissal. That analysis including the source documentation of timesheets, fuel transactions and tolling data now relied on by the Respondent was not made available to the Applicant at or prior to the 12 February Meeting.

[53] It was not possible for the Applicant 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. Secondly and more fundamentally, the allegations were simply not raised during the 12 February Meeting. In these circumstances the belief held by Mr French that the conduct justified immediate dismissal was not based on reasonable grounds.

[54] For the same reasons set out above, I find that the Respondent did not have reasonable grounds to hold a genuine belief that the Applicant had utilised his company fuel card for personal travel or had transported open or sealed containers of alcohol in the company car. The allegations were not raised with the Applicant in the 12 February Meeting.

[55] In the circumstances of this case it would have been appropriate for the Respondent to seek a response from the Applicant in relation to the alleged misconduct and take those responses into account. That it failed to do so means that Mr French's belief that the conduct was sufficiently serious as to justify summary dismissal was not based on reasonable grounds. Consequently, the Applicant's dismissal was not consistent with the Code. Having reached that conclusion, I must now turn to consider whether the dismissal was harsh, unjust or unreasonable.

Was the dismissal harsh, unjust, or unreasonable?

[56] Section 387 of the Act provides that, considering whether it is satisfied that a dismissal was harsh, unjust, or unreasonable, the Commission must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

Was there a valid reason for the dismissal related to the Applicant's capacity or conduct - s 387(a)?

[57] In order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded"[22] and should not be "capricious, fanciful, spiteful or prejudiced[23]." However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it were in the position of the employer[24].

[58] Turning now to the matters which the Respondent submits establish a valid reason for the Applicant's dismissal. They include the Applicant's alleged bullying, verbal abuse and threatening conduct directed towards junior staff as well as damaging property of other employees. No direct witnesses to these alleged incidents were called to give evidence by the Respondent. The only evidence pointed to was Mr French's conversations with the employees in question on 10 and 11 February 2025 in which he says they relayed stories of ill-treatment of junior staff by the Applicant. Even that evidence was in vague and non-specific terms. The Applicant vehemently denies he engaged in any conduct towards junior staff that could be described as abusive, bullying or threatening and also denies damaging property of such employees. The absence of probative evidence means that I cannot be satisfied the Applicant engaged in the alleged conduct. It does not establish a valid reason for the Applicant's dismissal.

[59] Turning to the allegations relating to the alleged timesheet fraud. By these allegations, the Respondent contends that the Applicant claimed payment for time worked when he could not have been at work. The Respondent submits that tolling and fuel transaction data for the Applicant's company vehicle shows the Applicant was not at work at a time for which he claimed payment for work. The evidence relied on by the Respondent was confined to a summary table prepared by Ms Hiremath some months after the Applicant's dismissal. Regrettably, the source data apparently relied on by the Respondent was not made available in these proceedings, although Mr Hiremath attested to the accuracy of the Time Sheet Summary. While I have no reason to distrust the evidence of Ms Hiremath, I am unable to accept that evidence as confirming misconduct on the Applicant's part. That is because of an inability of the Commission to assess the accuracy and reliability of the Time Sheet Summary by reference to the source data and in doing so consider the Applicant's responses or explanation of the specific incidents referred to in the Time Sheet Summary. Consequently, I am not satisfied that that the Time Sheet Summary and Ms Hiremath's evidence provides a sufficient evidentiary basis to find the alleged time sheet fraud occurred so as to establish a valid reason for dismissal.

[60] The next matter relied on by the Respondent to establish a valid reason for dismissal is that of the Applicant's conduct of undertaking out of hours work for Blue Ladder Projects. In doing so the Respondent contends that the Applicant was in breach of the 2022 Contract in directly sub-contracting work without notification or approval and in doing so also using his company vehicle.

[61] The Respondent was made aware on 11 December 2024 by the Applicant that he and other employees of the Respondent were doing 'cash work' outside of ordinary hours for another builder, although at that stage Mr French was unaware that the builder was Blue Ladder Projects. While aware of the out of hours work of the Applicant, Mr French took no steps to raise the matter with the Applicant until the 10 February Meeting. That was after the Instagram post was brought to his attention in January 2025. Even at the point of the 10 February Meeting, Mr French on his own evidence did not believe the conduct justified dismissal. That can be seen in his denial that the Applicant was dismissed at the conclusion of the 10 February Meeting and that there was in fact an agreed and amicable separation as reflected in his 10 February 2025 email to the Applicant.

[62] Putting aside the Respondent's inaction on the issue for a two-month period, it is necessary to determine whether the conduct was in breach of the 2022 Contract. The only clause the Respondent could point to was that of a definition in clause 1.1 which defines 'Restricted Activities' in the following terms;

"Restricted Activities" means canvassing or soliciting orders for the supply of services of the general description of those supplied by the Employer from any person who has during the Employee's employment transacted business with the Employer, whether directly or indirectly and whether alone or with any other person in any capacity including, without limitation, as:

(i) a consultant to that person;

(ii) an agent for that person;

(iii) an adviser to that person;

(iv) an employee of that person;

(v) a partner or jointly with that person; or

(vi) a member or shareholder or unit holder in any company, trust or business enterprise, associated with that person."

[63] "Restricted Activities' is defined for the purposes of the Agreement, and the term is used in clause 12 of the Agreement which is specifically concerned with post-employment restrictions. Clause 12 does not impose those restrictions on an employee during their employment. The Applicant's alleged conduct does not fall within the restrictions imposed by clause 12 as the alleged conduct occurred during the Applicant's employment. Furthermore, the Respondent had not at any stage transacted business with Blue Ladder Projects such as to bring it within the scope of the definition of 'Restricted Activities'. Consequently, I am not persuaded that the Applicant's conduct of doing some 'out of hours' work, which he had disclosed to the Respondent in December 2025, was in breach of his 2022 Contract.

[64] The further point made by the Respondent is that the Applicant as part of his job was required to engage with other builders to secure sub-contract work for the Respondent's carpentry team when there was insufficient work for that team. The evidence reveals the Applicant had done that on several occasions during 2024 and had secured Mr French's approval of POs for such work. The Applicant agreed that he had such an obligation in respect of seeking work when the Respondent's business was quiet and there was insufficient work for the carpentry team. He distinguished the Blue Ladder Projects work on the basis that at that time the Respondent's carpentry team was fully occupied and the work for Blue Ladder Projects was very limited in scope and duration.

[65] One final point to be considered in respect of the out of hours work is the Applicant's concession that he may have used his company vehicle while undertaking work for Blue Ladder Projects. I do not accept that use of his company vehicle to undertake work for another builder, albeit outside his ordinary hours of work for the Respondent, is a use permitted by the Company Vehicle Policy. The policy permitted the Applicant to '....use the vehicle tor personal use on weekends and outside company work hours for short trips'. While personal use is not defined to exclude the particular activity of doing cash work for another builder, it would strain credibility to suggest that the Respondent should bare the cost of purchasing or leasing a vehicle to assist an employee earn additional out of hours income from another builder. The Applicant's use of his company vehicle for such a purpose was in my view a breach of the Company Vehicle Policy which the Applicant had agreed to in 2022. It constituted misconduct although I am not satisfied that it was sufficiently serious as to establish a valid reason for the Applicant's dismissal. A formal warning would in my view have been the appropriate sanction.

[66] Another matter relied on by the Respondent is that of the Applicant's use of the company car and fuel card for personal trips to Torquay where he has family as well as a trip to Rutherglen. The Respondent submits that such trips could not be described as 'personal use for short trips'. For his part the Applicant submits that his understanding was that 'short trips' excluded interstate trips and that he had routinely used the vehicle to travel to Torquay without question or sanction.

[67] Left to individuals to determine whether particular travel meets the 'short trips' restriction is likely to lead to different judgements being made. Trips within the greater metropolitan area of Melbourne would seem to meet the 'short trips' restriction although minds may differ on that as well. Clearly the use of the vehicle for an interstate trip for holidays would fall outside of the 'short trips' limitation_._ Between those two examples there is room for considerable debate and confusion. Unhelpfully, the Company Vehicle Policy does not define short trips to provide guidance for employees. This absence of clarity ought to be addressed by the Respondent so there is no confusion and potential for abuse of the privilege certain employees enjoy in the provision of a company vehicle. Given the lack of policy clarity, I am not persuaded that the Applicant's conduct constituted misconduct that would establish a valid reason for his dismissal.

[68] Finally, turning to the alleged breach of the Company Vehicle Policy which prohibits the transportation of alcohol in a company vehicle during or outside of working hours including sealed containers. Mr French says he observed alcohol in the Applicant's company car although the detail of when this occurred was not provided. Nor could Mr French explain why he had not raised the matter at the time. There is insufficient evidence for me to establish when the incident occurred or the gravity of the alleged misconduct. Any reasonable person would agree the policy would and should prevent the consumption of alcohol in a company vehicle. Read literally however the policy goes much further and would extend for example to preventing an employee picking up and transporting a sealed bottle of wine home on a Friday evening. When cross-examined on this point Mr Koob conceded that he had done that very thing and agreed that the potential loss of his employment for such an action would seem unreasonable. I agree. I am not satisfied that the alleged conduct establishes a valid reason for dismissal.

[69] It follows from the foregoing that that I am not satisfied there was a valid reason for the Applicant's dismissal. This tells strongly in favour of a finding that the dismissal was unreasonable and thereby unfair.

[70] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[25] and in explicit,[26] plain and clear terms.[27]

[71] Mr French conceded during cross-examination that the decision to dismiss the Applicant on 12 February 2025 was taken by him prior to that meeting after he had spoken to other staff and further considered the alleged time sheet irregularities following the 10 February Meeting. It is plainly apparent that the Applicant was not notified of a valid reason prior to the decision being made to dismiss him. This weighs in favour of a finding that the dismissal was unjust, and thereby unfair.

Opportunity to respond to any reason related to capacity or conduct - s 387(c)

[72] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee's employment.[28]

[73] The opportunity to respond does not require formality and the factor is to be applied in a common-sense way to ensure the employee is treated fairly.[29] Where the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to the concern, this is enough to satisfy the requirements.[30]

[74] The Applicant was adamant that during the 12 February Meeting, the only issue referred to by Mr French was that of a generalised complaint by an unidentified employee about an unspecified incident. Mr Koob's unreliable recollection of the meeting and Mr French's concessions during cross-examination on the 12 February Meeting leads me to conclude that the matters referred to in the 12 February 2025 termination email were not put to the Applicant during the 12 February Meeting. In those circumstances, the Applicant had no opportunity to respond to the reasons relied on by the Respondent in dismissing him. That conclusion is fortified by Mr French's concession during cross-examination that the decision to dismiss the Applicant was made by him prior to the 12 February 2025 meeting.

[75] I am satisfied that the Applicant was not provided with an opportunity to respond to the allegations of misconduct on which the Respondent sought to rely in dismissing him. This weighs in favour of a finding that the dismissal was unjust and thereby unfair.

[76] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present. The Applicant did not request a support person in either the 10 February or 12 February Meetings. I consequently regard this factor as a neutral consideration.

Warnings regarding unsatisfactory performance - s 387(e)

[77] The dismissal did not relate to unsatisfactory performance. This factor is therefore not relevant in the circumstances.

Impact of the size of the Respondent on procedures followed - s 387(f)

[78] The Respondent's Form F3 indicates that at the time of the Applicant's dismissal it employed 13 employees although it was confirmed during the proceedings that there were 14 employees at the time of the Applicant's dismissal. The Respondent submits that as a small business its size did impact on the procedures followed by it in dismissing the Applicant. Mr French gave evidence that his responsibilities as director straddled all aspects of the business including human resources and compliance with employment laws. I accept that Mr Green may have been unfamiliar and inexperienced in dealing with disciplinary matters. The size of the Respondent did in my view contribute to the failures in the process of investigation, procedural fairness and dismissal of the Applicant by Mr French. This factor weighs against a finding that the dismissal was unfair.

Impact of absence of dedicated human resources management specialist/expertise on procedures followed - s 387(g)

[79] The evidence in this matter indicates that the Respondent did not have access to the services of an in-house human resources specialist. That said, it was open to the Respondent to seek professional assistance from an external employment specialist. The Respondent would be well advised to consider that option moving forward if confronting similar circumstances. This factor weighs neutrally in my consideration.

[80] Neither party raised any other matters that are relevant to assessing whether the dismissal of the Applicant was unfair. As such there is nothing to be weighed in my overall assessment.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust, or unreasonable?

[81] I have made findings in relation to each matter specified in s 387 of the Act as relevant. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust, or unreasonable.[31]

[82] I have found that the Applicant's dismissal was not supported by a valid reason. This weighs in favour of a finding that the dismissal was unfair. There were also significant procedural failures of the Respondent in carrying out the dismissal. Those failures were such that the Applicant was denied an opportunity to explain his conduct or seek to persuade the Respondent that dismissal was not appropriate. This weighs strongly in favour of a finding that the dismissal was unfair. While I accept the Respondent was a small business which contributed to the flawed investigation and disciplinary process, the weight I give to that criteria is not sufficient to displace the weight I give to the absence of a valid reason and the significant procedural failures. The remaining criteria were either not relevant or weighed neutrally in my consideration.

[83] Having considered each of the matters specified in s 387 of the Act, I have weighed the lack of a valid reason for dismissal and the serious procedural failures described above in the context of the size of the Respondent's business. On balance I am satisfied that the dismissal was unreasonable because of the lack of a valid reason and unjust because of the procedural failures. The dismissal was consequently unfair.

[84] Having found that the Applicant was unfairly dismissed I now turn to consider the question of remedy pursuant to section 390 of the Act. Significantly, under s 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:

(a) I am satisfied that reinstatement of the Applicant is inappropriate; and

(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

[85] Dealing firstly with whether reinstatement is inappropriate, the Applicant accepts that reinstatement is not appropriate in circumstances where the Respondent no longer employs a carpentry team. The Respondent also submits that reinstatement is inappropriate in circumstances where it has lost trust and confidence in the Applicant. In these circumstances I consider that reinstatement is inappropriate.

[86] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, "[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one..."[32].

[87] The Applicant submits that payment of compensation is appropriate because it took him several weeks following his dismissal to secure alternate work by establishing himself as a sub-contractor to building companies. The Respondent argues that no compensation is appropriate in circumstances where it believes the Applicant's conduct was inconsistent with his employment obligations.

[88] Having found that the Applicant was unfairly dismissed and noting that the Applicant was unemployed for several weeks following his dismissal, I consider that an order for payment of compensation is appropriate. Beyond the matter of the Applicant's conduct which I will further consider below pursuant to s 392(3), there is nothing in the material filed by the Respondent in the substantive proceedings that persuades me that a payment of compensation would be inappropriate.

[89] Turning now to the question of compensation, s 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:

(a) the effect of the order on the viability of the Respondent's enterprise;

(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;

(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;

(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;

(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the Commission considers relevant.

[90] I consider all the circumstances of the case below.

[91] The Respondent did not contend or file any material that would support a finding that an order for compensation would have an effect on the viability of the employer's enterprise. I consequently find that an order for compensation is unlikely to have an effect on the viability of the employer's enterprise (s 392(2)(a) of the Act).

[92] The Applicant commenced employment with the Respondent on 17 July 2017 and was terminated on 12 February 2025, a period of 7 years and 6 months which was served as a permanent full-time employee. I consider that the Applicant's not insignificant length of service is such that it does not favour an adjustment to the compensation otherwise calculated (s 392(2)(b) of the Act).

[93] As stated by a majority of the Full Court of the Federal Court, "in determining the remuneration that the Applicant would have received, or would have been likely to receive... the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination."[33]

[94] The Applicant contends that had he not been dismissed, he expected to remain employed by the Respondent for at least three years. Mr French confirmed in his evidence that the economics did not justify retention of the carpentry team and as such it is unlikely the Applicant would have remained employed beyond the six-week period within which the remaining members of the carpentry team finished up their employment with the Respondent. The Applicant agreed that given the entire carpentry team was dismissed in the six-week period following his dismissal it is unlikely he would have remained employed beyond a further period of six weeks. I find that the Applicant would not have remained employed beyond the six-week period referred to above. The Applicant's weekly earnings prior to his dismissal were $1,630 excluding superannuation, meaning that his anticipated earnings for the six-week period was $9,780 (s 392(2)(c) of the Act).

[95] Turning to the Applicant's efforts to mitigate his losses, the Applicant must provide evidence that he has taken reasonable steps to minimise the impact of his dismissal[34] and what is reasonable depends on the circumstances of the case.[35] The Applicant stated that he made various unsuccessful job applications in the wake of his dismissal. It should be noted that immediately prior to his dismissal the Applicant claimed during discussions with Mr French that he had received multiple job offers to consider, a statement the Applicant conceded during cross-examination was an ineffective 'bluff' to secure a salary review. While the Applicant did not provide evidence of his job applications I found his oral evidence to be credible in circumstances where he was forced to establish his own business in March 2025 to secure work. The Applicant's lack of success in securing direct employment as a carpenter also aligned with Mr French's evidence on the positive economics of sub-contracting carpentry work rather than employing carpenters directly. In all of these circumstances I am satisfied that the Applicant has taken reasonable steps to mitigate his losses. An adjustment to the compensation otherwise calculated above is not appropriate (s 392(2)(d) of the Act).

[96] As stated above, the Applicant was unable to secure alternate employment in the weeks following his dismissal and that it was not until the end of March 2025 that he set himself up as a sub-contractor in order to secure work with building companies, and in the 8-week period from the end of March he earned approximately $12,000. He confirmed that his average weekly earnings in that 8-week period were similar to his pre-dismissal weekly earnings. While no evidence of those earnings was produced, his figures were not challenged by the Respondent. I accept that the Applicant was not in receipt of income in the six-week period following his dismissal. In these circumstances it is not appropriate to make any deduction from the compensation otherwise calculated above (s 392(2)(e) the Act).

[97] As to the income likely to be earned in the period between the making of the order for compensation and the payment of compensation I am satisfied that the Applicant is likely to earn an average of $1,630 per week. Given my conclusion that the Applicant would not have remained employed beyond a further period of six weeks after his date of dismissal, it is not appropriate to take prospective earnings into account in determining the amount of compensation to be awarded (s 392(2)(f) of the Act).

[98] No other relevant matters were raised by the parties going to an order for compensation under s 392(2)(g) of the Act.

[99] As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries, "[t]he well-established approach to the assessment of compensation under s.392 of the FW Act... is to apply the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul's Licensed Festival Supermarket (Sprigg).[36] This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[37]."[38]

[100] The approach to calculating compensation per Sprigg is as follows:

Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

[101] I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated his employment to be $9,780. On the basis of my finding, it is likely the Applicant would have remained in employment for a further period of six weeks. This estimate of how long the Applicant would have remained in employment is the "anticipated period of employment".[39]

[102] I have found that the Applicant has earned remuneration since the date of his dismissal, and that he is likely to earn remuneration between the making of the order for compensation and the payment of compensation. However, no earnings were received by the Applicant in the "anticipated period of employment" after his date of dismissal. It is therefore not appropriate to make a deduction for income received since dismissal. I have also found that the Applicant has taken reasonable steps to mitigate his losses, and that no deduction is appropriate in these circumstances. The amount of compensation calculated remains $9,780.

[103] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.[40] I do not consider it appropriate to deduct an amount for contingencies.

[104] I have considered the impact of taxation but have elected to settle a gross amount of $9,780 which is to be subject to normal taxation. Having applied the formula in Sprigg, I am nevertheless required to ensure that "the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case."[41] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s 392(2) of the Act.

[105] If I am satisfied that misconduct of the Applicant contributed to the employer's decision to dismiss him_,_ I am obliged by section 392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct. As I have earlier found, the Applicant engaged in misconduct by using his company vehicle to undertake out of hours work for another builder. 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. Therefore, I intend to reduce the amount of the order for compensation on account of the Applicant's misconduct by an amount of 25%. The adjustment for misconduct reduces the amount of compensation to $7,335.

[106] Finally, ss 392(5) & (6) of the Act requires that the amount of compensation ordered by the Commission must not exceed the lesser of 6 months' pay calculated at the high-income threshold (HIT) or the total amount of remuneration the Applicant received or was entitled to receive during the 26-week period prior to his dismissal. The amount of compensation falls below the lesser of 6 month's pay and the HIT.

[107] In light of the above, I will make an order that the Respondent pay $7,335 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.

Andrew Cox v Hill And Muller Pty Ltd [2025] FWC 1653

At a glance

Court

Decision date

Source

Judgment (241 paragraphs)

Andrew Cox v Hill And Muller Pty Ltd [2025] FWC 1653 (17 June 2025)

Parties

Legislation Cited (1)

Cases Cited (7)