s.394 - Unfair dismissal

Application for relief from unfair dismissal - no valid reason for dismissal - dismissal harsh and unreasonable - compensation ordered.

• [1] Mr Justin Reid was employed by ETB Industries Pty Ltd (ETB) on a full-time basis as a Labourer from 23 October 2023 until he was dismissed on 20 February 2025. Mr Reid alleges that his dismissal was unfair. He seeks an order for compensation.

• [2] I heard Mr Reid's unfair dismissal case against ETB on 22 May 2025. Mr Reid gave evidence in support of his case. ETB did not participate in the hearing, nor did they file a response to Mr Reid's unfair dismissal application or take any other step in the proceeding. I am satisfied that ETB was informed of, and provided with a copy of, Mr Reid's unfair dismissal application, the directions I issued to prepare the matter for hearing, the material filed by Mr Reid in accordance with those directions, and the notice of listing informing the parties of the fact that the matter was listed for hearing, by video conference, at 10am on 22 May 2025.

• [3] ETB's lack of participation in the proceeding may relate to the fact that, according to information publicly available on the ASIC website, a restructuring practitioner was appointed to ETB on 9 March 2025 and notice was given on 15 May 2025 of the cessation of the restructuring practitioner. I am not aware of ETB having been placed into voluntary administration, liquidation or receivership.

• [4] Section 396 of the Fair Work Act 2009 (Cth) (Act) sets out four matters which I am required to decide before I consider the merits of the application.

• [5] I am satisfied on the evidence before the Commission that:

(a) Mr Reid's application for unfair dismissal was made within the period required in s 394(2) of the Act;

(b) Mr Reid was a person protected from unfair dismissal;

(c) Mr Reid's dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) Mr Reid's dismissal was not a genuine redundancy.

Was the dismissal harsh, unjust or unreasonable?

• [6] Section 387 of the Act requires that I take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Mr Reid's dismissal was harsh, unjust or unreasonable. I will address each of these matters in turn below.

• [7] It is necessary to consider whether the employer had a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal.[1] In order to be "valid", the reason for the dismissal should be "sound, defensible and well founded"[2] and should not be "capricious, fanciful, spiteful or prejudiced."[3]

• [8] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[4] The question the Commission must address is whether there was a valid reason for the dismissal related to the employee's capacity or conduct (including its effect on the safety and welfare of other employees).[5]

• [9] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.[6] It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason.[7]

• [10] The question of whether there was a valid reason must be assessed by reference to facts which existed at the time of the dismissal, even if they did not come to light until after the dismissal.[8]

• [11] The employer bears the evidentiary onus of proving that the conduct on which it relies took place.[9] In cases such as the present where allegations of serious misconduct are made, the Briginshaw standard applies so that findings that an employee engaged in the misconduct alleged are not made lightly.[10]

• [12] A reason will be 'related to the capacity' of the applicant where the reason is associated or connected with the ability of the employee to do his or his job.[11] The appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively.[12]

• [13] The letter of termination provided by ETB to Mr Reid relevantly states:

"We regret to inform you that your employment with ETB Industries is being terminated, effective February 20, 2025. Your termination is the result of poor performance as outlined below:

• Failure to attend work at the stated start time
• Failure to notify direct supervisor when unable to attend work
• Refusal to attend work

You were issued instructions on who to notify if unable to attend work on multiple occasions in the Policies and procedures. Due to your failure to attend site at the stated start time Whitehaven coal have stated they no longer want you on any of their sites. Under Clause 21.3 sections A, D, E and F in your contract, we have the right to terminate without notice. Your failure to properly and respectfully represent the company on multiple occasion has resulted in your immediate termination.

To appeal this termination, you must return written notification of your intention to appeal to Shannon or Andrew no later than 3pm on February 20, 2025."

• [14] Mr Reid gave evidence to the following effect in response to these allegations:

"2. I commenced full-time employment with ETB Industries Pty Ltd ("the Company") on

23 October 2023 as a Labourer. I held a Heavy Rigid Licence and Forklift Licence and

had 4.5 years of prior industry experience. My role included workshop labour, truck

driving, and general yard duties. My employment was terminated on 20 February 2025.

3. My gross annual salary was an average of $1,730.77.

4. I was a diligent and reliable employee. I never received any warnings verbal or written.

5. I was regularly commended for my work by supervisors such as Mr Lachlan McCarther

(Supervisor), Mr Max (Senior Manager), and Mr Jeff Richardson (Manager).

6. At times, I was relied upon heavily to assist others, even taking on dual roles including

duties as a storeman from September 2024 to November 2024.

7. In early February 2025, I lodged a complaint with the Fair Work Ombudsman regarding

a. I had not been paid for a full month and was owed significant amounts in

b. I was informed I was not getting paid because of insufficient work available,

however the Company has been actively hiring (Exhibit A).

c. I asked to be made redundant, however never received a reply to my request.

8. During this period, I raised concerns multiple times with Mr Andrew Grieve, the owner,

about the financial distress arising from not being paid.

a. His response was often dismissive or aggressive. In one message, he called me a "pest annoying" him (Exhibit B).

9. On 3 February 2025, the ATO confirmed I was owed approximately $9,000.00 in

10. I was constantly calling Mr Grieve and Ms Shanon Hudson (Mr Greive's Assistant) via

phone, and requesting meetings. Neither ever responded, nor followed up.

11. On 20 February 2025, I was dismissed via email without any prior notice or warnings.

This email was the first time I was informed of any alleged misconduct (Exhibit D).

a. Failure to attend work at the stated start time: I was only ever late once, by 3

b. Failure to notify supervisor when unable to attend: I always communicated

absences to my site supervisor, Pete, in a timely manner via text (Exhibit E).

c. Refusal to attend work: I declined to travel 4 hours away from home during a difficult time, as my partner had suffered a stroke and minor heart attack within a short span. I had informed Mr Grieve of this (Exhibit F).

d. My employment contract specifically stated that I was only to work at sites

including GBH and Vickery Coal (Exhibit F). The location I was instructed to

13. At no stage prior to my termination was I invited to a meeting or offered the opportunity

to bring a support person. No investigation was conducted, and I was given no chance

14. My dismissal has caused significant reputational damage. Whitehaven Coal was

referenced in my dismissal letter as no longer wanting me on site. This reference has

a. I have been actively seeking new employment but have encountered difficulty due to the nature of my dismissal. The financial hardship has continued."

• [15] I accept this unchallenged evidence given by Mr Reid. It follows that ETB did not have a sound, defensible or well-founded reason to terminate Mr Reid's employment. The absence of a valid reason weighs in favour of a finding that the dismissal was unfair.

• [16] I am satisfied on the evidence that Mr Reid was not notified of any valid reason for his dismissal.

• [17] I am satisfied on the evidence that Mr Reid was not given an opportunity to respond to any reason related to his capacity or conduct.

Unreasonable refusal to allow a support person (s 387(d))

• [18] I am satisfied on the evidence that there was not any unreasonable refusal by ETB to allow Mr Reid to have a support person present to assist in any discussions relating to his dismissal. That is because there were no such discussions.

Warnings of unsatisfactory performance (s 387(e))

• [19] Some of the reasons relied on by ETB in the termination letter to dismiss Mr Reid related to his conduct, while other reasons related to his performance. On the evidence before the Commission, Mr Reid was not warned about unsatisfactory performance before being dismissed.

Size of enterprise and absence of human resource specialists or expertise (s 387(f) and (g))

• [20] The evidence before the Commission does not disclose the size of ETB's enterprise or whether it had any dedicated human resource management specialists or expertise available at the time of Mr Reid's dismissal.

• [21] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

• [22] It is relevant that Mr Reid made a complaint to the Fair Work Ombudsman in early February 2025 about not having been paid his wages since about mid-January 2025 and his unpaid superannuation contributions. The timing of Mr Reid's dismissal, about three weeks later, supports the likelihood of a connection between Mr Reid's dismissal and his complaint to the Fair Work Ombudsman. I am satisfied, on the balance of probabilities, and having regard to all the circumstances that the fact that Mr Reid made a complaint to the Fair Work Ombudsman in early February 2025 formed an operative part of the reason for his dismissal by ETB on 20 February 2025. This supports Mr Reid's contention that his dismissal was unfair.

Conclusion on whether a harsh, unjust or unreasonable dismissal

• [23] After considering each of the matters specified in section 387 of the Act, my evaluative assessment is that ETB's dismissal of Mr Reid was harsh, unjust and unreasonable. There was no valid reason for Mr Reid's dismissal. On the evidence before the Commission, there was nothing about Mr Reid's performance, conduct or capacity that justified the decision to summarily dismiss him on 20 February 2025. Mr Reid was not afforded any procedural fairness in connection with ETB's decision to terminate his employment. That decision has had a significant impact on Mr Reid and his family. He has not yet been able to obtain alternative employment, which has caused financial hardship, and his employment prospects have been diminished by the reasons for which he has been dismissed, according to the termination letter.

• [24] Having found that Mr Reid was protected from unfair dismissal, and that his dismissal was unfair because it was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to him. Mr Reid does not wish to be reinstated to employment with ETB. Having regard to all the circumstances, including the fact that Mr Reid was not paid any wages from mid-January 2025 until his dismissal on 20 February 2025 and ETB has taken no part in these proceedings, I am satisfied that reinstatement would not be appropriate.

• [25] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied.[13]

• [26] Having regard to all the circumstances of the case, including the fact that Mr Reid has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate.

• [27] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Mr Reid. In assessing compensation, I am required by s 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.

• [28] I will use the established methodology for assessing compensation in unfair dismissal cases which was set out in Sprigg v Paul Licensed Festival Supermarket[14] and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases.[15] The approach to calculating compensation in accordance with these authorities is as follows:

Step 1: Estimate the remuneration the employee 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 she or she would have received if they had continued in their employment.

Remuneration Mr Reid would have received, or would have been likely to receive, if he had not been dismissed (s 392(2)(c))

• [29] Like all calculations of damages or compensation, there is an element of speculation in determining an employee's anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed.[16]

• [30] Mr Reid gave evidence, which I accept, that he was starting to look for alternative employment at the time he was dismissed because he had not been paid by ETB since about mid-January 2025. Mr Reid said it has been more difficult for him to obtain employment because he has been dismissed. I accept that evidence. Had he remained employed by ETB, Mr Reid estimates that it would have taken him two to three months to find another job.

• [31] Having regard to all the circumstances, including that Mr Reid lives in a regional area, Gunnedah, and he has not yet found alternative employment since his dismissal, I find on the balance of probabilities that if Mr Reid had not been dismissed on 20 February 2025, he would have remained employed by ETB for a further period of three months.

• [32] I am satisfied that Mr Reid would have continued to receive his normal salary of $90,000 per year if he had remained employed by ETB after 20 February 2025. Accordingly, I am satisfied that $22,500 (3/12 months x $90,000 = $22,500) is the remuneration that Mr Reid would have received, or would have been likely to receive, if he had not been dismissed.

Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))

• [33] I accept Mr Reid's evidence that, apart from unemployment benefits, he has not done any work and has not earned any income since his dismissal. Accordingly, Mr Reid has a period of financial loss of $22,500 from his dismissal on 20 February 2025 for a period of three months.

• [34] There is no evidence or material before the Commission to warrant a finding that any particular amount of compensation would affect the viability of the ETB's enterprise.

• [35] My view is that no adjustment will be made on this account.

• [36] My view is that Mr Reid's period of service with the ETB (about 16 months) does not justify any adjustment to the amount of compensation.

• [37] The evidence establishes that Mr Reid applied for many jobs through Seek, WorkPac and Programmed since his dismissal. Mr Reid is also seeking funding to obtain a qualification which he believes will enhance his prospects of obtaining employment.

• [38] In all the circumstances, I am satisfied that Mr Reid acted reasonably to mitigate the loss suffered by him because of the dismissal and I do not consider it appropriate to reduce the compensation on this account.

• [39] It is necessary to consider whether to discount the remaining amount ($22,500) for 'contingencies'. This step is a means of taking into account the possibility that the occurrence of contingencies to which Mr Reid was subject might have brought about some change in earning capacity or earnings.[17] Positive considerations which might have resulted in advancement and increased earnings are also taken into account.

• [40] The discount for contingencies should only be applied in respect to an 'anticipated period of employment' that is not actually known, that is a period that is prospective to the date of the decision.[18]

• [41] Because I am looking in this matter at an anticipated period of employment which has already passed (21 February 2025 to 20 May 2025), there is no uncertainty about Mr Reid's earnings, capacity or any other matters during that period of time.

• [42] In all the circumstances, my view is that it is not appropriate to discount or increase the figure of $22,500 for contingencies.

• [43] Save for the matters referred to in this decision, my view is that there are no other matters which I consider relevant to the task of determining an amount for the purposes of an order under s 392(1) of the Act.

• [44] I have considered the impact of taxation, but my view is that I prefer to determine compensation as a gross amount and leave taxation for determination.

• [45] I have found that Mr Reid did not engage in any misconduct. Accordingly, there is no basis to reduce the amount of compensation on this score.

Shock, distress or humiliation, or other analogous hurt (s 392(4))

• [46] I note that in accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.

• [47] The amount of $22,500 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which Mr Reid was entitled in his employment with the ETB during the 26 weeks immediately before his dismissal. In those circumstances, my view is that there is no basis to reduce the amount of $22,500 by reason of s 392(5) of the Act.

• [48] No application has been made to date by the ETB for any amount of compensation awarded to be paid in the form of instalments.

• [49] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, my view is that there is no basis for me to reassess the assumptions made in reaching the amount of $22,500.[19]

• [50] For the reasons I have given, my view is that a remedy of compensation in the sum of $22,500 (less taxation as required by law) in favour of Mr Reid is appropriate in the circumstances of this case. An order will be made to that effect.

[1] Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8

[2] Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 at 373

[4] Walton v Mermaid Dry Cleaners Pty Ltd [1996] IRCA 267; (1996) 142 ALR 681 at 685

[6] King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24]

[8] Newton v Toll Transport Pty Ltd [2021] FWCFB 3457 at [99]

[10] Sodeman v The King [1936] HCA 75; (1936) 55 CLR 192 at 216 per Dixon J

[11] Crozier v Australian Industrial Relations Commission [2001] FCA 1031 at [14]

[12] Crozie v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137 at [62]

[13] Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]

[14] [1998] AIRC 989; (1998) 88 IR 21

[15] Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431

[16] Double N Equipment Hire Pty Ltd v Humphries [2016] FWCFB 7206 at [16]- [17]

[17] Ellawala v Australian Postal Corporation Print S5109 at [36]

[18] Enhance Systems Pty Ltd v Cox PR910779 at [39]

[19] Smith v Moore Paragon Australia Ltd [2004] AIRC 57; (2004) 130 IR 446 at [32]

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