s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - dismissal found to be unfair - reinstatement not appropriate - compensation ordered.

• [1] This decision concerns an application made by Mr Michael Galway (the Applicant) for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 Cth (the Act). The Applicant who was employed by Vivin Imports Pty Ltd (the Respondent) alleges he was dismissed on 23 May 2025. The unfair dismissal application was lodged by the Applicant on 11 June 2025.

• [2] The matter was listed for hearing before me on 22 October 2025 to deal with the merits of the application. Both parties filed material in advance of the hearing in accordance with directions issued. Mr Ruben Clark of Counsel who was granted permission to appear on behalf of the Applicant pursuant to s 596(2) of the Act called the Applicant to give evidence. Mr Ritesh Bhatia (Director) appeared on behalf of the Respondent and also gave evidence.

• [3] The Applicant commenced employment with the Respondent on 28 February 2024 in the position of Independent Sales Manager Victoria Country/Tas, initially reporting to Mr Peter Vincent, the Senior Business Manager. His Contract of Employment dated 29 December 2023 provided for a base salary of $110,000, standard superannuation, a mobile phone, laptop, use of a full maintained vehicle for business/limited personal use and a potential sales bonus subject to achieving specified sales targets. While regularly required to travel in his role, his work location was identified as Epping in Victoria where the Respondent has its Victorian Warehouse. The Applicant's role involved selling the Respondent's furniture products to furniture retailers across regional Victoria, Tasmania and a small number of accounts in South Australia and metropolitan Victoria[1].

• [4] The Applicant's Contract of Employment included an annual Sales Target of $4 million, the attainment of which would entitle the Applicant to a bonus of $25,000[2]. Mr Bhatia states that as the Applicant started late in the 2023/2024 financial year, a reduced budget of $732,000 was set for the March-June 2024 period against which he states the Applicant only achieved 64.8%[3]. The Applicant states that the sales target for the 2024/2025 was adjusted down to $2.8 million against which he says he initially performed well, achieving 188.32% of the target in the Spring sales period[4]. In the Autumn Sales period, the Applicant's performance fell to 35.2% of the target although he notes that only one of his colleagues exceeded 60% in that period[5]. When questioned on his performance in the Spring Sales period, the Applicant confirmed that the sales attributed to the Spring Sales was a subset of his overall quarterly sales performance and reflected a particular sales campaign to clear certain stock. He further accepted that his overall quarterly sales performance in that quarter was well below target.

• [5] The Applicant states that initially he had fortnightly sales meetings with Mr Vincent and Mr Bhatia, but the frequency of these meetings later changed to monthly meetings. He says that from October 2024, Mr Bhatia stopped attending the meetings, but the Applicant continued to meet regularly with Mr Vincent until Mr Vincent's resignation in April 2025. The Applicant says that from this point he no longer had regular performance meetings and only met with Mr Vincent's replacement Mr Reshad Siddique occasionally. The Applicant recalls on one occasion being told by Mr Siddique during a meeting that he (the Applicant) was a valued team member, knew what he was doing and that the sales budget was going to be reduced by $800K to $2 million[6].

• [6] The Applicant's sales target of $2.8 million for the 2024/2025 financial year represented a 30% reduction on the Applicant's initial target of $4 million. Mr Bhatia states that the reduction reflected broader economic conditions and lower consumer demand and was intended to give the Applicant a fairer chance of success. Mr Bhatia also states the Applicant achieved $1.3 million in sales in the period from July 2024 to May 2025[7], being only 47.7% of the reduced target. According to Mr Bhatia, the Applicant's sales were insufficient to justify a full-time sales manager and compared unfavourably to the results of sales managers in NSW, Vic, WA, SA and Qld who achieved between 90-100% under the same market conditions and with the same support from business management[8]. To emphasise the financial position of the Respondent's Victorian business, Mr Bhatia provided a summary of the Victorian operation's financial performance for the 2024/2025[9]. The Profit & Loss (P&L) summary revealed a loss for the year of $384,418.26 on revenue of $11,981,834.40.

• [7] Monthly Performance reports[10] provided in respect of other sales managers and sales agents across Australia showed a spread of sales performance ranging from 76.4% to 109.4% of targets. The two other Victorian sales agents achieved full year figures of 76.7% and 109.6% respectively. Mr Bhatia confirmed that the sales targets set for sales agents differed across the business, reflecting the varying mix of metropolitan, regional, large chain stores and independent stores. A review of the Monthly Sales Figure reports reveal that the Applicant's target for 2024/2025 was initially set at $2.8m while the targets for the two other Victorian sales staff were respectively $6.5m and $6m. By further comparison, one interstate sales agent had an annual sales target of $15m against which he achieved 92.2%.

• [8] It is noted that the sales figures for the Applicant for 2024/2025 do not include the full financial year given he was dismissed on 23 May 2025. Exclusion of the May/June sales and targets from the Applicant's sales figures results in a progressive YTD performance of $1,264,975 sales against the progressive target of $2,268,000. This represents 55.7% against target. By comparison, his Victorian colleagues had at the same point of the financial year achieved progressive sales figures of 76% and 112%.

• [9] Mr Bhatia states he wrote to Mr Vincent as early as October 2024 expressing concern that the Applicant had only achieved 58% of his first quarter sales target for 2024/2025 to which Mr Vincent replied he was working on it[11]. Shortly after this exchange Mr Vincent raised the sales performance issue with the Applicant in an email dated 12 December 2024[12]. Mr Bhatia further states that the Respondent assisted the Applicant through a range of measures including;

• national campaigns (Spring/Autumn clearances) counted towards the Applicant's budget;
• special pricing and targeted promotions to boost sales;
• strategy meetings to set daily targets, sales plans, and customer approaches;
• marketing support and promotional materials;
• Melbourne showroom events;
• regular virtual meetings with Mr Bhatia and Peter Vincent until December 2024, then ongoing; and
• weekly/monthly meetings with Peter where the Sales Targets Vs Actuals were discussed.

• [10] Meeting notes[13] of monthly sales meetings were regularly distributed to the Applicant and another colleague. The Applicant was also provided with an individual Monthly Sales Figures report for the year to date[14]. The reports in evidence reveal that the Applicant was consistently and significantly below his sales target for the 2024/2025 financial year and as of May 2025 had only achieved 47.4% YTD[15]. The Applicant agreed in cross-examination that the sample monthly reports provided by the Respondent were typical of the reports produced. The Applicant further agreed that he received the Monthly Sales Figure reports and that his sales were well below his target. He states however that he was never warned verbally or in writing that his job would be at risk if he did not meet his sales targets[16].

• [11] The Applicant also described daily emails he sent to Mr Bhatia, Mr Vincent, and Mr Siddique after he replaced Mr Vincent. He says he included in these emails details of customers he had met with that day, any relevant comments they made, issues raised, and the value of the product sold. He further states that the daily reports reveal the amount of effort and frequency of contact he made with customers. He says he also included updates on any factors that may be impacting sales. He confirmed that he never received a reply to his daily reports or a warning regarding his sales performance.[17]

• [12] The Applicant attributed his poor sales performance figures to a number of factors including the following;

• sales and orders he made were often not assigned to him and so were not tracked against his targets;

• the drought in regional Victoria since 2023 impacted on regional customer demand for furniture;

• Mr Siddique established and maintained direct contact and relationships with customers in the Applicant's areas of responsibility; and

• • limited stock was held in the Epping warehouse which resulted in longer product delivery timeframes compared to competitors, which adversely impacted sales.[18]

• [13] Mr Bhatia was cross-examined on the above reasons put forward by the Applicant for his poor sales performance and variously responded as follows;

• He accepted that if the Applicant's sales were attributed to another sales agent it would negatively impact on the Applicant's sales figure; although he was not aware of this ever happening. The example referred to by the Applicant was only to the value of approximately $5,000, which represented a small percentage of the Applicant's annual sales target of $2.8 million.

• He did not accept that the drought conditions in western Victoria impacted to the extent contended by the Applicant. He referred to the sales figures for Harvey Norman shops in Western Victoria which he said did not reveal a sales drop comparable to that experienced by the Applicant, who only serviced independent stores in western Victoria and not Harvey Norman stores.

• • Mr Bhatia initially claimed that the Applicant had never raised the issue of the western Victorian drought affecting his sales performance but conceded that the Applicant did raise the issue in a comment in his 6 May 2025 Daily Report[19]. The Applicant recorded in that report that he had received feedback from one store that 'Farmers buying grain and water for their cattle'. Mr Bhatia accepted that the inference to be drawn from that comment was that graziers were spending money on grain and water because of drought conditions in western Victoria.

• Mr Bhatia also pointed to the sales figures of the two other Victorian sales agents who also serviced regional Victoria and had not experienced the same magnitude of sales shortfall against their sales targets that the Applicant suffered. He conceded however that he was unsure of the proportion of those agents' sales that were derived from western Victorian stores.

• Mr Bhatia rejected that the Victorian warehouse held limited stock, such that it adversely impacted sales. He conceded that all other things being equal, a delay in delivery could affect sales but maintained that a 1-2 week delivery time experienced in Victoria was standard in the industry, meaning that the issue of stock delivery delays raised by the Applicant was in his opinion, only a small factor.

• [14] Mr Bhatia also claims that the Applicant engaged in misconduct. This he states occurred when the Applicant did not follow the Special Pricing Offer and offered lower prices to customers. This was drawn to the Applicant's attention in an email on 27 March 2025[20]. Mr Bhatia referred to a further instance of claimed misconduct where the Applicant produced duplicate call records on two consecutive days - 30 April and 1 May 2025[21], which Mr Bhatia suggested was an indication that the Applicant was fabricating his call records. When questioned on the two incidents of alleged misconduct Mr Bhatia agreed that after the pricing issue was drawn to the Applicant's attention there was no repeat of that behaviour. Mr Bhatia also conceded that the matters raised by him were not considered sufficiently serious at the time to warrant any kind of warning and did not constitute misconduct.

• [15] In response to Mr Bhatia's claims of misconduct on his part, the Applicant responded that he had negotiated a lower price but that he confirmed this price with Mr Siddique before finalising the sale. He further states that all orders required approval from either Mr Vincent, Mr Siddique, or an internal processor in Sydney whose first name was Melanie and who would provide a second check and would not process an order if the price was incorrect. As regards the claim of duplicate call records, the Applicant denies fabricating the 30 April and 1 May 2025 records. He states the duplication was a mistake and the issue was addressed with Mr Bhatia the following day and was never raised by Mr Bhatia again prior to these proceedings[22].

• [16] The Applicant states that on 23 May 2025 he received a phone call from Mr Siddique around 2-2.30pm asking him if could meet with him by phone at 3.00pm that day. The reason for the meeting was not disclosed to the Applicant at that stage. The Applicant says he assumed it was a sales performance meeting as he had not had a sales meeting for a while and had not spoken with either Mr Siddique or Mr Bhatia for about two weeks. Mr Siddique called the Applicant at approximately 3pm and was accompanied by Mr Mark Redman, Head of Logistics. According to the Applicant, Mr Siddique said words to the effect that "due to failure to meet your budget targets, you're hereby terminated. We will pay you the remainder of the week, your four weeks, plus whatever is owed." The Applicant states he did not reply as he was shocked.

• [17] Later that day on 23 May 2025, Mr Siddique sent an email and text message to the Applicant in the following terms;

As discussed in our phone conversation, I'm writing to formally confirm that, due to sales budgets not being met, we are unable to continue your employment with us. As a result, your position will be terminated effective 23/05/2025.

You will receive payment in lieu of a 4-week notice period, which will be included in your final pay.

We appreciate the efforts you've made during your time with us and wish you all the best in your future endeavours.

• [18] Mr Bhatia agreed during cross-examination that he had not directly warned the Applicant at any time during his employment that his employment was at risk and nor was he aware that any other staff member had done so. Nor could he identify any written document that warned the Applicant that his employment was at risk because of his sustained poor sales.

• [19] The Applicant states that he has been unemployed since dismissal, has applied for Centrelink benefits and received his first payment on 1 September 2025. He further states that he has been unable to get a new job in furniture sales because of the post-employment restraints in his Employment Contract that prevent him from undertaking work in competition with the Respondent or from soliciting business from any of the Respondent's clients anywhere in Australia for up to 12 months. He also says that he has tried looking for other sales roles, but the nature of the Employment Contract post-employment restraint clause limits the possibility of working in furniture sales which was his only experience over the last 20 years[24].

• [20] The Applicant also submits that at age 66 he needs to be realistic about his employment prospects and is exploring opportunities outside of furniture sales work. He says he had planned to continue working for the Respondent until his retirement at 70 but does not wish to be reinstated in the event he is successful with this application. That is because of the distasteful manner of his dismissal and his loss of trust in Mr Bhatia and Mr Siddique[25].

• [21] 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.

• [22] 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.

• [23] Having found that the Applicant was dismissed within 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.

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

• the Applicant was dismissed on 23 May 2025 and filed his unfair dismissal application on 11 June 2025, that latter date being within 21 days of the date of his dismissal;

• at the time of the Applicant's dismissal the Respondent employed approximately 65 employees and is therefore not a small business employer within the meaning of s 23 of the Act;

• the Applicant commenced employment with the Respondent on 28 February 2024 and at the time of his dismissal had been employed for a period of approximately 15 months, that period being more than the minimum employment period of six months;

• the Applicant's annual base salary was approximately $110,000, on top of which he received superannuation contributions, a laptop, mobile phone and use of a company supplied motor vehicle for business and personal use, meaning that 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.

• [25] Having considered each of the initial matters, I am satisfied that the application was made within the required period in subsection 394(2), the Applicant was a person protected from unfair dismissal, the small business fair dismissal code does not apply, and the dismissal was not a genuine redundancy. I am now required to consider the merits of the application, and it is to that I now turn.

Was the dismissal harsh, unjust, or unreasonable?

• [26] 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)?

• [27] In order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded"[26] and should not be "capricious, fanciful, spiteful or prejudiced[27]." 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[28].

• [28] The Applicant submits that there was not a valid reason for dismissal. The basis for that submission is that the sales targets against which the Applicant's performance was assessed were objectively unreasonable. The Applicant states the targets were unrealistic, were not agreed to by him and there were multiple factors that acted to prevent him from achieving his sales targets.

• [29] The first observation to be made is that contrary to the Applicant's claim, his sales targets were agreed. He accepted the initial sales target of $4m when he signed his Contract of Employment and there is no evidence that he objected to or challenged the revised sales target of $2.8m when it was set for the 2024/2025 period. As to whether the Applicant's target was objectively reasonable, there was no evidence led by either party that would establish that the number of stores serviced by the Applicant or that the level of historical sales in the Applicant's region of responsibility were such as to render the Applicant's target unreasonable. To put the Applicant's sales target in perspective, his Victorian colleagues had targets of $6m and $6.5m respectively for the 2024/2025 financial year. Some of the Applicant's interstate colleagues had even higher targets. I also note Mr Bhatia's evidence on the poor financial performance of the Respondent's Victorian operations and that a significant contributor to that was the Applicant's weak sales.

• [30] A further point to be made about the targets is that on the Applicant's own evidence, he initially performed well against his targets during the Spring Sales period of 2024/2025 achieving 188% in that campaign but subsequently struggled during the Autumn Sales campaign. That evidence appears to run counter to his claim that the targets were unreasonable. My view is fortified by the comparative sales figures for the February - May 2024 period versus the same period in 2025. In 2024, the Applicant achieved sales of $395,108. In the comparable February - May period in 2025 he only achieved sales of $316,814, a significant drop on his sales from the preceding year. It is also significant that the deterioration in the Applicant's sales was sustained in the second half of the 2024/2025 period, falling regularly from a high of 75% in October 2024 to 32% in April 2025. While other employees suffered poor months in the 2024/2025 year, no other employee whose sales figures were produced, experienced such a sustained decline in sales performance against their targets.

• [31] Turning now to the factors the Applicant claims contributed to his weak sales, the following may be said. Firstly, the Applicant's claim that his sales were routinely allocated to other sales staff was rejected by Mr Bhatia who expressed no knowledge of this being a routine occurrence. While the Applicant identified an example of an incorrect allocation of sales, it was only to the value of several thousand and does not account for the shortfall in sales of over $1m at the end of May 2025. There was insufficient evidence before me to establish that incorrect allocation of sales routinely and negatively impacted the Applicant. Even allowing for a small amount of sales allocation errors, this would not explain the magnitude of the Applicant's sales shortfall against his target.

• [32] The Applicant also refers to the drought in western Victoria as a factor that contributed to the significant shortfall in his sales. He refers anecdotally to comments made to him by store owners in the western region of Victoria to the effect that farmers were spending money on feed and water for their stock rather than on furniture. It is however noted that the Applicant also had responsibility for norther and eastern regional Victoria which were not reported to have been drought affected. Mr Bhatia gave evidence that the Applicant only serviced independent stores and not the chain stores such as Harvey Norman which had not shown a similar reduction in their sales in Western Victoria. Nor was it possible to easily reconcile the sales figures of the Applicant with his Victorian colleagues who also serviced regional customers and had not suffered a similar reduction in their sales. Finally, the Applicant does not appear to have regarded it as significant enough issue to raise other than by a single reference in the 6 May 2025 Daily Report. I am not satisfied that the effects of the drought in western Victoria can be relied on by the Applicant to explain the gravity of his sales shortfall.

• [33] The Applicant also claims that Mr Siddique established and maintained direct customer contacts which had the effect of undermining sales made by or attributed to the Applicant. This argument is rejected. Mr Siddique only commenced in his role following Mr Vincent's resignation in April 2025. Noting that the Applicant was terminated on 23 May 2025, any adverse impact of Mr Siddique on the Applicant's sales could at worst only have been in the final month of the Applicant's employment. This does not explain the prolonged deterioration in the Applicant's sales performance.

• [34] Finally, the Applicant's claim that reduced inventory in the Epping warehouse led to customer delivery delays and lost sales was roundly rejected by Mr Bhatia. While conceding that all else being equal a delivery delay could affect sales, Mr Bhatia maintained that a 1-2-week delivery time for stock delivered out of Sydney was in any event the standard delivery time in the industry. He rejected that the claimed issue of Epping warehouse inventory was a significant factor, if at all, in explaining the Applicant's sales shortfall. I found Mr Bhatia's evidence on this point to be credible. I am consequently not persuaded that that this issue assists explain the Applicant's sales performance.

• [35] Having regard to the above, I am not persuaded that the Applicant has put forward a credible explanation for the shortfall in his sales against target. Nor am I satisfied that the sales target was objectively unreasonable having particular regard to the performance of the Respondent's Victorian operations, the sales targets and performance of the Applicant's peers both in Victoria and nationally and the sustained decline in the Applicant's sales. In all of these circumstances, the shortfall in the Applicant's sales against his target was so significant as to establish a valid reason for his dismissal. This weighs in favour of a finding that the dismissal was not unfair.

• [36] Finally, the Respondent also contends that the Applicant engaged in misconduct by failing to follow the Special Pricing Offer and producing a duplicate email for his daily reports on 30 April and 1 May 2025. That submission is rejected. To the extent there was any merit to the allegations, Mr Bhatia accepted during cross-examination that the conduct was not so serious as to constitute misconduct and was not pursued at the time of the incidents. I reject that either incident constitutes misconduct that would establish a valid reason for dismissal.

• [37] 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,[29] and in explicit,[30] plain and clear terms.[31]

• [38] The Respondent submits that the Applicant was on notice that his sales performance was well behind his target and that he ought to have understood the Respondent was considering the termination of his employment. That submission has no merit. While I accept that the Applicant was regularly updated on his sales performance, he was at no stage advised that the Respondent was considering the termination of his employment because of that sales performance. He was spoken to perfunctorily on the phone by Mr Siddique on 23 May 2025 and was notified of his dismissal due to failing to meet sales targets. I am consequently not satisfied that the Applicant was notified of the valid reason for his dismissal prior to the decision being made. This weighs in favour of a finding that the dismissal was unfair.

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

• [39] 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.[32]

• [40] 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.[33] 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.[34]

• [41] The Applicant was not provided with an opportunity to respond to the reason for his dismissal prior to that decision being communicated to him by Mr Siddique in their telephone meeting on 23 May 2025. He was simply notified of the decision to dismiss and was not given an opportunity to explain the reasons for his weak sales performance or why he should not be dismissed. This denied the Applicant an opportunity to try and persuade the Respondent that his dismissal should not proceed. This weighs in favour of a finding that the Applicant's dismissal was unfair.

• [42] 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. While the Applicant was given limited notice of the meeting on 23 May 2025 and was not advised of a right to be accompanied by a support person, he did not request a support person in the 23 May 2025 meeting. I consequently regard this factor as a neutral consideration.

Warnings regarding unsatisfactory performance - s 387(e)

• [43] The dismissal related to unsatisfactory performance. Specifically, the Respondent contends there was a sustained failure of the Applicant to achieve an acceptable level of sales performance against his sales budget. Clearly, he should have been warned or put on notice about that performance. There is however no evidence that the Applicant was formally warned or put on notice that his employment was at risk due to his poor sales performance against budget. I am consequently not satisfied that the Applicant received any warning regarding his unsatisfactory performance. This weighs in favour of a finding that the dismissal was unfair.

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

• [44] The Respondent's Form F3 indicates that at the time of the Applicant's dismissal it employed 65 employees. The Respondent does not contend that its size adversely impacted on what it described as a fair and transparent process in managing the Applicant's performance and dismissal. This factor weighs neutrally in my consideration.

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

• [45] 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, the Respondent submits that the absence of in-house HR expertise did not adversely impact the process it followed in dismissing the Applicant. This factor weighs neutrally in my consideration.

• [46] The Applicant raised a number of matters which he contends speak to the dismissal being harsh, unjust or unreasonable. The matters he raises are a history and culture of forgiveness within the Respondent whereby sales staff are not performance managed or disciplined for failing to meet their sales targets which demonstrates differential and unfavourable treatment of him. He also raises his age (65 at the date of dismissal) and the post-employment restraints imposed by his Contract of Employment, both of which he submits limit his ability and prospects of finding alternate work.

• [47] Turning to the first matter raised by the Applicant, there is no evidence before me that indicates that employees with similar levels of sales underperformance as the Applicant were treated more favourably by the Respondent. I accept that some other employees are also falling below their respective sales targets, but none are as far below their target as the Applicant was at the time of his dismissal. The next lowest performing sales agent for whom sales figures were provided, performed above 70%, compared to the Applicant's figure of 55% at the end of April 2025. It is also noted that the Applicant's sales target was much lower than all but one of his peers whose sales performance figures were in evidence.

• [48] Turning to the Applicant's age and post-employment restraints. I accept that the combination of these two factors is likely to impact the Applicant's prospects of securing comparable employment in the same or a similar field. Even if there is a question over the legal enforceability of the post-employment restraints, the Applicant has proceeded on the basis that the post-employment restraints are lawful. That is because of a not unreasonable fear the Applicant holds of being exposed to legal action from the Respondent if he breached the post-employment restraints. I accept that the Applicant's age and post-employment restraints are likely to negatively impact on his employment prospects. This weigh in favour of a finding of harshness.

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

• [49] 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.[35]

• [50] I have found that the Applicant's dismissal was supported by a valid reason. This weighs in favour of a finding that the dismissal was not unfair. However, there were 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 performance or seek to persuade the Respondent that dismissal was not appropriate. Those procedural failures along with the poor employment prospects of the Applicant due to his age and post-employment restraints are of such significance as to displace the weight I accord to the valid reason.

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

• [52] 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.

• [53] Dealing firstly with whether reinstatement is inappropriate, the Applicant does not seek reinstatement in circumstances where he has lost trust in Mr Bhatia and Mr Siddique as managers. Having regard to the Applicant's views I consider that reinstatement is inappropriate.

• [54] 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..."[36].

• [55] The Applicant submits that payment of compensation is appropriate because he has been unable to secure suitable alternate employment at this point. The Respondent argues that no compensation is appropriate in circumstances where the Applicant's performance was demonstrably deficient over a sustained period.

• [56] Having found that the Applicant was unfairly dismissed and noting that the Applicant remains unemployed, I consider that an order for payment of compensation is appropriate. 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.

• [57] 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.

• [58] I consider all the circumstances of the case below.

• [59] 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).

• [60] The Applicant commenced employment with the Respondent on 28 February 2024 and was terminated on 23 May 2025, a period of only 15 months served as a permanent full-time employee. I consider that the Applicant's short length of service is such that it does not favour an adjustment to the compensation otherwise calculated (s 392(2)(b) of the Act).

• [61] 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."[37]

• [62] The Applicant contends that had he not been dismissed, he expected to remain employed by the Respondent for a further four years until his planned retirement at age 70. Having regard to the Applicant's short period of service, I cannot be confident that the Applicant would have remained employed by the Respondent for a further four years. More so because of the Applicant's poor sales performance against budget which I have found established a valid reason for his dismissal. As I have found above, the Applicant was not however formally warned about his poor sales performance although I am satisfied he was well aware of the unfavourable trajectory of his sales.

• [63] Were the Applicant warned and afforded an opportunity to address his deficient sales performance I believe a reasonable period in which to demonstrate improvement would have been a period of twelve weeks. I am not however confident he could have arrested the sustained decline in his sales performance. I do not accept the Applicant's speculation that it is likely he would have turned his performance around given the downward trajectory of his sales over the six months prior to his dismissal. The only time the Applicant demonstrated above budget performance was in the Spring Sales campaign of 2024 although that performance was only a subset of his overall performance in that period which remained well below budget. In all of these circumstances I find it is unlikely that the Applicant would have remained employed beyond a further period of twelve weeks. The Applicant's weekly earnings prior to his dismissal were $2,115 excluding superannuation, meaning that his anticipated earnings for the twelve-week period is $25,380 (s 392(2)(c) of the Act).

• [64] 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[38] and what is reasonable depends on the circumstances of the case.[39] The Applicant states that he has so far been unsuccessful in securing alternate employment in the wake of his dismissal. He refers to the difficulty of securing furniture sales roles because of his age and the post-employment restraint clauses in his Employment Contract. 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).

• [65] I accept that the Applicant did not receive income in the twelve-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).

• [66] 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 unlikely to earn income in that period. It is consequently not appropriate to take prospective earnings into account in determining the amount of compensation to be awarded (s 392(2)(f) of the Act).

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

• [68] 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).[40] This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[41]."[42]

• [69] 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.

• [70] 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 $25,380. This is on the basis of my finding that it is likely the Applicant would have remained in employment for a further period of twelve weeks. This estimate of how long the Applicant would have remained in employment is the "anticipated period of employment".[43]

• [71] I have found that the Applicant has not earned remuneration since the date of his dismissal, and nor is he likely to earn remuneration between the making of the order for compensation and the payment of compensation. Therefore, 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 any 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 $25,380.

• [72] 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.[44] I do not consider it appropriate to deduct an amount for contingencies.

• [73] I have considered the impact of taxation but have elected to settle a gross amount of $25,380 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."[45] 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.

• [74] 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 found the Applicant did not engage in misconduct, no deduction for misconduct is to be made.

• [75] 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 I have calculated falls below the lesser of 6 month's pay and the HIT.

• [76] In light of the above, I will make an order that the Respondent pay $25,380 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.

• [77] I am satisfied that the Applicant was dismissed at the initiative of the Respondent. Having been satisfied in respect of the other initial matters, I have considered and determined that the Applicant's dismissal was harsh, unjust, and thereby unfair. I am further satisfied that reinstatement would be inappropriate and that an award of compensation is appropriate.

• [78] Finally, I have determined to make an order that the Respondent pay $25,380 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision. An order giving effect to this decision will be issued separately in conjunction with this decision.

[1] Exhibit A1, Witness Statement of Michael Galway, at [5]-[8], Exhibit A2, Contract of Employment. Dated 29 December 2023

[2] Exhibit A2, Clause 8 - Key Performance Indicators

[3] Exhibit R1, Witness Statement of Ritesh Bhatia, dated 24 September 2025, at [12]-[13], Exhibit R7, Applicant Sales Budget v Actual Full Year 23/24

[4] Exhibit A1, at [10]-[11], Exhibit A3, Email from Kerri Chadwick, dated 17 December 2024, titled Spring Sale 2024 - 17/12/2024

[5] Exhibit A1, at [24], Annexure A8, Email from Kerri Chadwick, dated 20 May 2025, titled Autumn Sale 2025 -20/05/2025

[7] Exhibit R9, Applicant Sales Budget v Actual for 24/25

[8] Exhibit R1, at [15]-[18], Exhibit R10, Performance of other sales representatives

[9] Exhibit R23, Vivin Imports Melbourne P&L Summary for 2024/2025

[10] Exhibit R10, Monthly Sales Reports for 24/25, Exhibit A9, Monthly Sales Reports

[11] Exhibit R1, at [19], Exhibit R11, Email exchange between Ritesh Bhatia and Peter Vincent, dated 18 October 2024

[12] Exhibit R12, Email from Peter Vincent to Michael Gallway and Michael Alun, dated 12 December 2024, titled Vic Sales

[13] Exhibit R14, January 2025 Meeting Notes, dated 31 January 2025 Exhibit R15, February Meeting Notes, dated 7 February 2025

[14] Exhibit R16, YTD Sales Figures report, dated 19 March 2025, Exhibit R17, YTD Sales Figures report, dated 16 April 2025, Exhibit R18 YTD Sales Figures report, dated 14 May 2025

[19] Exhibit A9, 6 May 2025 Daily Report

[20] Exhibit R21, Email from Reshad Siddique to Applicant, dated 27 March 2025, titled 'Taegon Stock - Melbourne furniture'

[21] Exhibit R22, Applicant's Call Records for 30 April 2025 and 1 May 2025

[22] Exhibit A12, Second Witness Statement of Michael Galway, dated 2 October 2025, at [13]-[14]

[23] Exhibit A10, Email from Reshad Siddique to Applicant, dated 23 May 2025, titled 'End of Employment'

[26] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371, 373.

[28] Walton v Mermaid Dry Cleaners Pty Ltd [1996] IRCA 267; (1996) 142 ALR 681, 685.

[29] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

[30] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).

[32] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].

[33] RMIT v Asher [2010] FWAFB 1200; (2010) 194 IR 1, 14-15.

[34] Gibson v Bosmac Pty Ltd [1995] IRCA 222; (1995) 60 IR 1, 7.

[35] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]- [7].

[36] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198, [9].

[37] He v Lewin [2004] FCAFC 161, [58].

[38] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

[39] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

[40] [1998] AIRC 989; (1998) 88 IR 21.

[41] [2013] FWCFB 431.

[42] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [16].

[43] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

[44] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

[45] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [17].

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