s.394 - Unfair dismissal

Jim Aitken & Partners No. 1 Pty Ltd t/as Aitken Real Estate

Application for unfair dismissal remedy - whether dismissed - whether harsh, unjust or unreasonable.

• [1] Mr Felipe Martin was employed by Jim Aitken & Partners No. 1 Pty Ltd trading as Aitken Real Estate (Aitken Real Estate) as a Licensed Real Estate Salesman from 15 April 2020 until 7 February 2025. On 21 February 2025, Mr Martin applied in time for a remedy for unfair dismissal under section 394 of the Fair Work Act 2009 (Cth) (the Act).

• [2] Mr Martin says he was forced to resign under false pretences and so was dismissed for the purposes of s.386(1)(b) of the Act after a dispute over payment of commission led him to be called a "troublemaker" and a "cancer to the business". Despite this submission, the parties agree that the employment was terminated by mutual agreement. Aitken Real Estate denies that Mr Martin was dismissed.

• [3] Under s. 382 of the Act, a person is protected from unfair dismissal if, at the relevant time they:
  • have completed at least the minimum employment period; and
  • earn an annual income of less than the high income threshold, are covered by a modern award or are employed under an applicable enterprise agreement.

• [4] There is no dispute that Mr Martin had completed the minimum employment period and that his annual income was less than the high income threshold.[1] He was also covered by a modern award. Mr Martin is protected from unfair dismissal in relation to his employment with Aitken Real Estate.

• [5] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied that they have been dismissed; the dismissal was harsh, unjust or unreasonable; and if relevant, the dismissal was not consistent with the Small Business Fair Dismissal Code (Code) or not a case of genuine redundancy.[2] This was not a case of genuine redundancy, and the Code did not apply.

• [6] The question is whether Mr Martin has been unfairly dismissed. The answer is "No" because Mr Martin has not been dismissed.

• [7] In January 2025, a dispute arose between the parties about the calculation of commission payments for the period ending in December 2024. There was dialogue back and forth between them, but the dispute was not resolved.

• [8] On 3 February 2025, Mr Martin received a phone call from Mr Stephen Murphy, a Director of Aitken Real Estate. The discussion quickly became heated. Mr Murphy told Mr Martin he should resign; that he was a troublemaker and a "cancer to the business". Mr Martin refused to resign, and ended the call by saying "Make me". He was overheard saying these words by a colleague after putting his phone on speaker as the conversation progressed.

• [9] Mr Martin came away from the phone call thinking that his relationship with Mr Murphy was no longer tenable. This view was reinforced by his discovery that afternoon that Aitken Real Estate had locked him out of access to 'AgentBox', a customer database system containing the information needed by Mr Martin to effectively perform his role.

• [10] On 4 February 2025, Mr Martin sought advice from the Fair Work Ombudsman. He then wrote to Aitken Real Estate "with a heavy heart and a clear request for resolution". He sought clarity on his employment status and to ensure the matter was handled fairly and legally.

• [11] On 5 February 2025, Aitken Real Estate wrote to Mr Martin requesting him to attend a "proposed termination meeting" on 6 February 2025. The email attached a letter containing allegations of misconduct and underperformance. The letter stated that Aitken Real Estate was considering the termination of his employment. The meeting on 6 February 2025 was subsequently deferred until 7 February 2025 by agreement.

• [12] On the evening of 6 February 2025, Mr Martin was offered employment by Chapman Real Estate Hazelbrook, a competitor of Aitken Real Estate. The offer of employment was on largely comparable terms to his employment with Aitken Real Estate.

• [13] On 7 February 2025, Mr Martin met with Aitken Real Estate, represented by Ms Sue Dalton (HR/Administration), Mr Grahaem Evans (Sales Manager) and Mr Damian Sexton (Director). The context for the discussion was Aitken Real Estate's proposal to terminate Mr Martin's employment. The meeting began with a discussion of allegations made against Mr Martin relating to the period from 18 January 2025 to 4 February 2025 (conduct concerns) and January 2025 (performance concerns). It is notable that these concerns correlate in time with the commission payment dispute. Notes of the meeting confirm that Aitken Real Estate advised Mr Martin that it was proposing to terminate his employment and sought his response. Mr Martin disagreed that his conduct was cause for termination and denied that he had underperformed. He alleged that Mr Murphy had engaged in bullying and harassment and had been aggressive toward him. There were three breaks during the meeting for the parties to consider their options and responses. Just before the second break, Mr Martin said that the relationship was not reparable; that both sides had lost trust; and that he wanted a decision on next steps. Mr Sexton asked if he was open to other solutions, and Mr Martin said there was no other solution. After the second break, Aitken Real Estate expressed to Mr Martin that it thought the relationship could be saved. It proposed that he move to the Penrith office, working directly with management. A third break was then taken for Mr Martin to think about the idea.

• [14] During the third break, Mr Martin spoke separately to Mr Sexton. When the meeting resumed, Mr Martin said that he did not want to work at any other office, including because he did not want to work with Mr Muphy who was based there. He said he wanted to be terminated with 'no bad blood, no repercussions' and 'fair resolution' - one that protected his entitlements.

• [15] Agreement was reached that Mr Martin's employment would be terminated by mutual agreement. He would be paid his full termination entitlements, including 4 weeks' wages in lieu of notice, annual leave and leave loading, and commission on exchanged sales for the first quarter of 2025. The outcome was valuable to Mr Martin: instead of resigning with 1 weeks' notice, he would be paid a sum equivalent to 4 week's wages. Although he did not discuss his plans with Aitken Real Estate, finishing up immediately would also allow him to accept and commence new employment with Chapman Real Estate.

• [16] There is a dispute about whether Aitken Real Estate also agreed to release Mr Martin from his post-employment contractual restrictions. I am prepared to accept that Mr Martin assumed, perhaps by reference to there being "no repercussions", that this was understood. Notes of the meeting confirm that Mr Martin was reminded of his obligation to protect company information but not other post-contractual employment obligations. It may have been a matter discussed privately with Mr Sexton in between breaks, but the evidence on this point is inadequate. Subsequent discussions between Mr Martin and Chapman Real Estate about where he should work from appear to run contrary to the notion that geographical restraints on working for competitors of Aitken Real Estate no longer applied. In the end, the dispute is not necessary to decide. What remains of the terms of the contract between the parties is a matter for the courts. It is a separate question to whether Mr Martin has been dismissed.

• [17] After the meeting on 7 February 2025, Ms Dalton sent Mr Martin a letter confirming his dismissal "by mutual agreement". The letter stated the reason for dismissal as "unable to come to a resolution to remain in employment that was suitable" and set out the details of his termination payment. No mention was made of payment of commission. Ms Dalton explains that this was because she was under time pressure and wanted something to confirm the agreement for payment of 4 weeks' notice. A subsequent version of the letter provided more detail of the termination payments and included a 'standard form of words' reminding Mr Martin of his post-employment obligations.

• [18] On 11 February 2025, Mr Martin accepted the offer of employment from Chapman Real Estate. The offer provided for a commencement date of 20 February 2025.

• [19] On 19 February 2025, Aitken Real Estate became aware of Mr Martin's new job. It instructed its lawyers to write to Mr Martin and remind him of his post-contractual employment obligations. A letter sent on its behalf accused Mr Martin of downloading and printing confidential information from its systems without proper purpose during his employment and potential "further sabotage" to its electronic records. It notified Mr Martin of the potential for legal action to be taken to restrain his conduct and seek damages and costs.

• [20] Upon receipt of this letter, Mr Martin decided to apply to the Commission for an unfair dismissal remedy. He submits that the conduct of Aitken Real Estate in misrepresenting that he was released from his post‑employment obligations induced him to accept the termination of his employment, with the result that he was forced to resign. The submission is rejected. On the facts, Mr Martin did not resign (and so could not have been forced to resign). Although the case is not put on this basis, there was also no termination at the initiative of Aitken Real Estate, despite its intention to dismiss Mr Martin at the start of the meeting on 7 February 2025.

• [21] Having reached the view that his continuing employment in the business was no longer tenable, Mr Martin reached agreement with Aitken Real Estate for the termination of his employment on terms that were acceptable to him. Any subsequent failure to comply with those terms does not change the fact of the agreement reached.

• [22] For the reasons set out above, I find that Mr Martin was not dismissed.

Mr B Miles of Counsel on behalf of Jim Aitken & Partners No. 1 Pty Ltd.

[1] Form F3 Employer response to unfair dismissal application filed on 23 May 2018

[2] Fair Work Act 2009 (Cth), s.385

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