s.394 - Application for unfair dismissal remedy

[1] Mr Joshua Westerberg has applied pursuant to s 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. Mr Westerberg was employed by Volando Group Pty Limited (Volando) from July 2024 to 12 September 2025. He was employed as Volando's Operations and National Sales Manager. He was dismissed for serious misconduct.

[2] Volando contests the application. It accepts that Mr Westberg was a person protected from unfair dismissal for the purposes of s 382. Unfair dismissal is defined in s. 385. Volando does not contest that, for the purposes of that section, Mr Westberg was dismissed, nor does it rely on the dismissal being consistent with the Small Business Fair Dismissal Code nor that the dismissal was a case of genuine redundancy. It submits that the dismissal was not harsh, unjust or unreasonable and consequently it was not unfair.

[3] At hearing Mr Westerberg relied upon his written statement, a written statement of Andrew Macdonald a former CEO, Director and Company Secretary of Volando, and written and oral submissions. Volando relied upon witness statements from Jesse Wade Heinz Ross Co-founder of Volando and Louise Scorgie its General Manager and written and oral submissions.

[4] Volando is an Australian based beverage company it conducts a business known as Volando Tequila. It markets, imports, and sells alcoholic beverages in the premium spirits sector. It is a related entity to a US firm Orlando Tequila.

[5] Volando is referred to in the material as a startup company. Mr Westerberg commenced with the company when it first started operating in July 2024. When Mr Westerberg was dismissed, Volando had three employees. As a startup, and given Mr Westerberg's senior role, Mr Westerberg worked long and irregular hours; working into the evening at client tasting events and on weekends.

[6] Mr Westberg was engaged under a contract of employment. His salary was set at $147,000 plus superannuation and other benefits. He stated that there was an agreement that 25% of his salary could be withheld and be directed towards providing him equity in the company.

[7] In February 2025 Mr Westerberg loaned the company $20,000 and contributed another $4,973 of his own funds to cover client costs. Mr Westerberg stated that the company has not repaid him those amounts.

[8] The employment contract was comprehensive. It relevantly included a performance appraisal clause obliging Mr Westerberg to participate in performance reviews. It included a detailed email policy which prohibited the use of the company email system for personal purposes during business hours. Mr Westerberg's hours of work were stipulated in the contract to be 8:00 AM to 5:00 PM, Monday to Friday. Another clause required Mr Westerberg to devote the whole of his time, attention and abilities during working hours to carrying out his duties.

[9] The contract provided for termination at any time without notice for serious misconduct. The definition of serious misconduct in the contract relevantly included the following:

(ii) commits any serious or persistent breach of the Employee's obligations under this Agreement;

(iv) engaging in wilful or deliberate behaviour that is inconsistent with the continuation of the contract of employment; ...

[10] The contract also allowed Volando to suspend Mr Westerberg where it reasonably believed that he had committed serious misconduct. The purpose of the suspension being to conduct an investigation.

[11] In June 2025, Ms Scorgie was appointed National Sales Director. Mr Westerberg was required to report to Ms Scorgie. In August 2025, Ms Scorgie had concerns about Mr Westerberg's work performance and in a series of emails raised a number of issues with him. These emails continued in early September 2025. On 8 September 2025 Ms Scorgie requested that Mr Westerberg identified three tasks that she asked be performed that week. They related to ensuring company records were appropriately saved in the company's computer system and that at least one tasting was scheduled per week. There was a phone conversation between Mr Westerberg and Ms Scorgie on 9 September 2025 about these matters, in particular the instruction about weekly tastings, and further emails on 10 September and 11 September 2025.

[12] On 9 September 2025, Mr Westerberg sent an email to an external party. Attached to that email was his professional resume. The email was addressed to ruben@think24hrfitness.com.au. The subject matter of the email was "JW Resume". The email was sent at 9:19 AM. The body of the email was as follows:

See attached, would love to have a chat with someone if the opportunity presents. These things always feel better with a direct connection for both parties.

[13] The attached resume was headed Josh Westerberg, operations and sales manager. It commenced with the following paragraph.

I'm a results-driven sales and operations professional with over a decade of experience leading teams, managing key accounts, and driving growth for some of Australia's top beverage brands. My background spans national sales strategy, business development, and operational excellence, with a proven track record of exceeding targets and building strong client relationships. While most of my career has been focused on the alcohol industry, I am deeply passionate about health and wellness and am eager to transition into this space. I'm excited to bring my commercial expertise, strategic mindset, and commitment to positive change to an industry that aligns with my values and personal interests.

[14] Mr Jesse Ross is a co-founder of the Volando Group. He exercised ultimate decision making in the company and control over the Australian entity. He resides in the US. In late August and early September 2025, he received reports from Ms Scorgie about Mr Westerberg's performance and was copied into some but not all the emails between Ms Scorgie and Mr Westerberg. He also communicated directly with Mr Westerberg about those matters.

[15] On 12 September 2025 at 8:24 AM Mr Westerberg sent an email to Ms Scorgie in the following terms:

Firstly, I'm aware the broader business has directed all communication through you.

Late yesterday I've received a medical certificate to take personal leave from 12/09 up till 02/10 to allow time to consider my options and ensure I can approach next steps constructively.

Please confirm that this leave can be recorded accordingly.

I would also like to clarify any outstanding entitlements or reimbursements owed to me, to ensure that all payments are up to date while we consider next steps. This includes the funds I loaned to the business.

[16] Ms Scorgie stated that later that day she requested supporting documentation concerning the leave and the return of company property. She said also she had a telephone conversation with Mr Ross in which he informed her that Mr Westerberg had used Volando's email account to contact external organisations regarding potential employment opportunities.

[17] Mr Ross stated that he had reviewed the company's business records in September 2025 and discovered the 12 September 2025 email. His statement said that when he read the email which was evidence that Mr Westerberg was actively seeking alternative employment and using company systems during working hours to do so, he regarded it as serious misconduct which represented a fundamental breakdown in the employment relationship and behaviour that was inconsistent with the employment agreement. He decided that no further investigation or remediation steps were required and sent Mr Westerberg an email terminating his employment. The email was sent at 10.46 am on 12 September 2025.

Subject: Termination of Employment - Serious Misconduct Josh,

This email confirms the termination of your employment with Volando Group Pty Ltd, effective immediately, on the grounds of serious misconduct under your Employment Agreement dated 9 July 2024 ("Agreement").

It has been established that during your contracted working hours you used company email systems to apply for external employment opportunities. This is a breach of your obligations under the Agreement, including:

Clause 4(b): Obligation to carry out all reasonable instructions of the Employer and undertake work as reasonably required.

Clause 22: Obligation to devote your full time, attention, and ability during work hours to the company, act in good faith, and not act to the company's detriment.

Clause 10(d): Prohibition on using the company's email system for personal purposes outside authorized circumstances.

Clause 31(iv) and (viii): Willful or deliberate behavior inconsistent with the Agreement and refusal to comply with lawful and reasonable instructions constitutes serious misconduct, justifying termination without notice.

These breaches are in addition to your prior failures to:

Provide a medical certificate as required under Clause 18(d);

Respond to and follow directions from your line manager under Clause 4(b);

Comply with instructions regarding Friday tastings, in breach of Clause 22.

Taken together, this represents serious and persistent misconduct, justifying summary termination.

In accordance with Clause 31, your employment is terminated immediately and without notice. You remain entitled only to payment of accrued statutory entitlements (including annual leave and superannuation). No further payments will be made.

Return of Company Property In accordance with Clause 32, all company property in your possession must be returned. This includes but is not limited to:

A company representative will attend your location by 4:00pm today, to collect these items. You are required to make them available at that time.

Failure to comply will result in immediate recovery action.

You remain bound by the following provisions of your Agreement:

Clause 28 - Confidential Information: You must not use, disclose, or record any company confidential information.

Clause 29 - Intellectual Property: All intellectual property created during your employment remains the sole property of the company.

Clause 34 - Restraint of Trade: You must not solicit clients or staff, interfere with company relationships, or engage in a competing business within the restraint area for the restraint period set out in your Agreement (up to 24 months).

The company reserves all rights to enforce these obligations in full.

[19] The first issue for consideration is whether the dismissal was harsh, unjust or unreasonable. It considering that question the Commission is required to take into account the matters listed in s 387.

[20] The first of those matters is whether there was a valid reason for the dismissal related to the applicant's capacity or conduct. Volando submitted that while concerns were raised over Mr Westerberg's performance, the reason for the dismissal was Mr Westerberg seeking alternative employment using its email system and doing so during business hours. This was said to be serious misconduct justifying summary dismissal.

[21] The conduct is described above. Mr Westerberg sent an email from his business email address to an email address with the domain name think24hrfitness.com.au annexing his resume and indicating he "would love to have a chat with someone if the opportunity presents". The resume indicated that he was "deeply passionate about health and wellness and am eager to transition into this space".

[22] Mr Westerberg explained that the email was not about finding another job. He said that it was an exercise in networking and that a connection of his, Ruben, who he described as a "very connected individual' and personal friend had asked him to send his resume so he could get a better understanding of Mr Westerberg's role and to tailor the network he could introduce Mr Westerberg to in the interest of making connections to buyers for the Respondent. I do not accept this explanation. The email and attachment read together amount to Mr Westerberg sounding out Ruben to see if there was a job available for him. It was not an application for a job, but it was an indication that he was open to a take on a new role with a different company. I am not convinced by Mr Westerberg's attempt to characterise it otherwise.

[23] Having found that Mr Westerberg's email was an attempt to find another job, the question is whether sending it amounted to serious misconduct. I find that it did not. In its submissions Volando described the reason for dismissal as Mr Westerberg engaging ion personal activities completely unrelated to the business by seeking alternative employment using Volando's email system during working hours.

[24] I was taken to the definition of serious misconduct in the Fair Work Regulation 2009 as well as the characterisation of serious misconduct in the contract_._ The references to the Regulation Take the matter no further for two reasons, first the reasons for dismissal in the termination letter were not couched in terms of reliance with the Regulation. Second, if they were, there is nothing in that definition, and nothing in the submissions made on behalf of Volando that supports the characterisation of Mr Westerberg's conduct as serious misconduct under the regulation.

[25] I make the same finding in relation to the contract. On the material provided Volando has failed to make out that Mr Westerberg's conduct breached the obligations under the contract in a manner that constituted serious misconduct as defined in the contract. The termination letter asserted that Mr Westerberg breached the contractual obligations to carry out all reasonable instructions and undertake work as reasonably required; to devote his full time attention and ability during work hours to the company, act in good faith, and not act to the company's detriment, to not use the company's email system for personal purposes, to wilfully or deliberately behave in a manner inconsistent with the Agreement and to refuse to comply with lawful and reasonable instructions. Of the matters relied upon there appears to have been a breach of the obligation to not use the company's email system for personal purposes but I do not consider that that breach amounted to serious misconduct. This however was not a serious or persistent breach of Mr Westerberg's obligations under the Agreement as contemplated in the definition of serious misconduct in the contract.

[26] For the purposes of s. 387(a) I find that there was not a valid reason for the dismissal related to the applicant's capacity or conduct. This falls in favour of a finding that the dismissal was harsh, unjust or unreasonable.

[27] As to the other matters in s. 387, there was no valid reason for dismissal and so Mr Westerberg was not notified of a valid reason for dismissal. (s 387(b)) Ms Westerberg was dismissed by email. There was no chance prior to receiving the email for Ms Russell to respond to the reasons for dismissal (s 387(c)). There was no opportunity to have a support person in any discussions about the dismissal as there were no discussions (s 387(d)). Volando acknowledged that as a general proposition dismissal should be communicated face-to-face where practicable it relies on the fact that it was a small startup operation where the decision maker was in the United States of America along with that there being no dedicated human resource management to explain this failing. These matters are relevant for the purposes of ss 387(f) and (g). I consider that the small size of the respondent's enterprise and the absence of human resources advisers had a negative impact on the process followed in effecting the dismissal. As to other relevant factors under s. 387(h), Mr Westerberg contends that dismissing Mr Westerberg for sending a single email was disproportionate. I agree. It also said that Mr Westerberg has not been paid his termination payments in the form of payment in lieu of notice and other accrued entitlements because of the summary nature of the dismissal. I also agree that this is a relevant factor, and it tells in the unfairness of the dismissal.

[28] Taking into account the matters in s. 387 I find that the dismissal was harsh, unjust and unreasonable. There was no valid reason for the dismissal. Mr Westerberg was afforded no procedural fairness and the company's actions were disproportionate to any perceived misconduct on his part.

[29] The primary remedy, where a dismissal has been found to be unfair, is reinstatement. Mr Westerberg however has found other employment and no longer wants to work for Volando. Volando also opposes reinstatement. Volando is a small start-up company and Mr Westerberg held a senior role in a small organisation. Volando also considers it can no longer trust Mr Westerberg. While I do not consider there to be a basis for the asserted mistrust, given the parties' position on reinstatement, I find that reinstatement is inappropriate. I am satisfied that it is appropriate to make an order for compensation in lieu of reinstatement.

[30] In coming to a quantum of compensation, I am required to consider each of the matters in section 392 of the Act.

[31] Relevant to those considerations, at the time of dismissal, Mr Westerberg's was paid $1,891.62 per week. He found work in early October 2025. The work is in solar energy. It is a sales role. Mr Westerberg is paid on a commission only basis. In that role, since the dismissal, he has been paid $6,452.00 as commission for the months of November and December 2025. He has not sought further employment. Another relevant factor is that Volando is a small business and Mr Westerberg's relationship with the senior managers of the business was strained at the time of the dismissal suggesting that the parties may well part ways in the near future.

[32] The well-established approach to the assessment of the quantum of compensation under s.392 of the Act is to apply the "Sprigg formula". That formula is derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul's Licensed Festival Supermarket [1998] AIRC 989; (1998) 88 IR 21 which concerned compensation in similar provisions in earlier legislation. The application of that formula, in the context of the current legislation, was explained by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206.

[33] The first step is to consider what remuneration Mr Westerberg would have received, or would have been likely to receive, if he had not been dismissed. This requires an assessment of how long he would have remained at Volando and the remuneration he would have earned. The next step is to make the various adjustments in accordance with s.392 for matters that include the impact of an order for compensation on the business, the length of service of the applicant, monies earned since dismissal, any deduction on account of the employee's misconduct and the application of the cap of no more than earnings in the six months prior to the dismissal. A reduction for contingencies has also been commonly applied to take into account likely changes in circumstances that may impact ongoing employment or earnings. This approach is subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.

[34] The exercise of determining compensation requires some speculation. As Volando was a start-up company it is difficult to determine how long Mr Westerberg would have remained in employment as one factor in determining that question requires an assessment of the success of the company. Another factor is the strained relationship between Mr Westerberg and those running the company. The emails in August and September 2025 between Ms Scorgie, Mr Ross and Mr Westerberg suggest that the company was unhappy with Mr Westerberg's performance and required significant improvements. Mr Westerberg started looking for other options around the same time. As Volando was a small start-up company and Mr Westerberg held a key role in a small team, the decline in the relationship is a significant factor. In all those circumstances I consider that Mr Westerberg's employment would not have lasted beyond the end of 2025, around another 15 weeks. He was dismissed on 12 September 2025 he was not paid in lieu of notice. His lost earnings were 15 weeks' pay at $1,891.62 per week. A total of $28,374.30.

[35] Applying the next step involves making various adjustments for matters that include the impact on the business, monies earned since dismissal, any reduction on account of misconduct and a possible reduction for contingencies which may take into account likely changes in circumstances that may have an impact on ongoing employment, such as Mr Westerberg's attempts to find other work and ongoing earnings, such as the failure to fully mitigate the total loss by seeking other income on top of the sales work. The length of employment is also a factor to consider. Mr Westerberg commenced employment in July 2024 and worked for 14 months. I have considered these factors in the assessment of how long Mr Westerberg would have remained in work and do not propose to make an adjustment to the compensation for these factors. The effect on the business is also relevant. I note that I was not told that a compensation order would threaten the viability of the business and so make no deduction.

[36] I will not make any adjustments in relation to misconduct because of the findings made above about that there was no valid for dismissal for dismissal. I find there was no misconduct justifying a deduction.

[37] My assessment of the loss is total loss is $28,374.30. That figure is less than the statutory cap in s. 392(5) so no further deduction is necessary.

[38] I will order the payment of compensation of $28,374.30. Applicable taxes will need to be remitted to the ATO in relation to that amount. Superannuation will also apply at 12% and so a payment of $3,404.92 into Mr Westerberg's superannuation account will also be ordered.

[39] My conclusion in these proceedings then is that I find that Mr Westerberg was unfairly dismissed. I find that it is inappropriate to order reinstatement and that it is appropriate to order compensation in lieu of reinstatement. The sum of compensation that I find is appropriate is $28,374.30 to be taxed as required and a payment on account of superannuation of $3,404.92.

• [40] Orders will issue separately[1].

[1] PR796588

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