Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - dismissed for reasons relating to performance and conduct - valid reasons - opportunity provided to respond to reasons - dismissal not unfair

• [1] Mr Nicholas Fletcher (the applicant) was employed as a general manager by Gordon House Management Pty Ltd (the respondent / employer). He was initially employed by a related company in 2015 and held various roles in other associated entities of Gordon House. From 25 June 2024, Mr Fletcher was employed as General Manager with Gordon House. Gordon House manages accommodation and has an onsite café. Mr Fletcher was responsible for managing the onsite café.

• [2] Gordon House dismissed Mr Fletcher for unsatisfactory performance. Mr Fletcher's employment ended on 6 February 2025.

• [3] Mr Fletcher applied for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (Cth). He did so within the required period of 21 days after the dismissal took effect.

• [4] I held a determinative conference in this matter on Wednesday 28 May 2025. Mr Fletcher gave evidence on his own behalf. Mr Christopher Banson, Director, Gordon House (and its related entities), gave evidence on behalf of the employer. There were no other witnesses. Gordon House filed a witness statement on behalf of Ms Lisa James, strategy analyst at Saltwater Properties Pty Ltd. As Ms James did not attend the determinative conference to affirm her evidence, I have not taken it into account.

• [5] Having considered the evidence and submissions of the parties, I am satisfied that the employer's dismissal of Mr Fletcher was for valid reasons, it followed a fair procedure, and the dismissal was not otherwise harsh, unjust, or unreasonable. I therefore dismiss the application. My reasons follow.

• [6] I am satisfied that Mr Fletcher is a person who is protected from unfair dismissal.

• [7] Mr Fletcher completed the minimum period of employment required by s 383(a). The employer is not a small business employer as defined in s 23. Gordon House employed 12 employees at the time of Mr Fletcher's dismissal. However, Mr Banson confirmed that Gordon House is an associated entity of 20 other corporate entities and together all those entities employed more than 15 employees at the time of Mr Fletcher's dismissal. Mr. Banson also confirmed that Mr Fletcher was not employed by the one entity throughout the period from 2015 until his employment ended, but his service among the related entities was recognised as one period of service with the employer.

• [8] At the time of his dismissal, Mr Fletcher's annual earnings were less than the high-income threshold.

• [9] There is no dispute that the employer dismissed Mr Fletcher within the meaning of s 386.

• [10] Mr Fletcher's dismissal was not a case of genuine redundancy within the meaning of section 389.

Mr Fletcher was initially employed in May 2015 as a general worker on a casual basis. In August 2016, he began full time employment as Operations Manager. At the time that his employment ended, he was general manager on a full-time basis at Gordon House. He started this role on 25 June 2024.

• [11] In August 2024, the employer employed Ms James in a role called "Strategy Analyst," which was to assist general managers with budgeting, rostering, and financial record-keeping. Mr Fletcher says that he was promised training in monthly reconciliation, but it never eventuated. However, he also says that he worked "hand in hand with [Ms James] on cash reconciliation" from September 2024. I find that Ms James was employed to assist Mr Fletcher (and other general managers) with reconciliation, and she worked regularly with Mr Fletcher.

• [12] On the 19 December 2024, Mr Fletcher changed the locks on Lot 24. Lot 24 was an area near the café that included a room. Mr Fletcher changed the lock to that room by removing its barrel lock and replacing it with a swipe pad and electronic lock that could be accessed with a keycard.

• [13] In late November or early December 2024, Mr Banson says that he had agreed to lease Lot 24 from its owners. He informed Mr Fletcher of this. Mr Fletcher says that Lot 24 was part of the common area, and the café and its customers were already using the area. Mr Fletcher says that Mr Banson told him he had signed the lease, and walked him through the area around 10 or 12 December 2024. Mr Fletcher was of the view that he was acting under instructions and information that Gordon House had obtained the lease to the area.

• [14] At the time that Mr Fletcher changed the locks, Gordon House had not yet signed a lease for Lot 24. Mr Banson says that when the landlord learned that Mr Fletcher had changed the locks, they did not sign the lease, and so Gordon House was not able to occupy the area.

• [15] On 6 January 2025, Mr Banson emailed Mr Fletcher a letter inviting him to a formal meeting via video link. The letter informed Mr Fletcher that the meeting would be about:

Underperformance in the role of General Manager of Gordon House Apartments:

• Cash reconciliation incomplete and $35,247.62 unexplained and unaccounted for period 22.02.2024 to 30.09.2024
• Cash reconciliation incomplete for period 01.10.2024 till 30.12.2024
• Unauthorized access to Lot 24, without owner, agent or [the employer's] consent to use location and change locks.

• [16] The letter said that he could have a support person attend the meeting with him. The letter concluded with:

As part of the outcome, the Organisation may take disciplinary action against you, up to and including termination of your employment.

• [17] The meeting occurred on 7 January 2025. Mr Fletcher attended alone; Mr Banson and Ms James attended on behalf of the employer. Mr Banson arranged for the meeting to be recorded and transcribed. Mr Fletcher says that he was not aware that the meeting would be recorded. The transcription appears to have been produced automatically, as it appears verbatim but with clear nonsensical errors that can be the result of automatic transcription. During the determinative conference. I provided Mr Fletcher with time to review the transcription. While he disagreed with certain aspects of the recording (that probably resulted from the automatic transcription), he confirmed that "the spirit of the conversation [was] correct" but that it was not entirely accurately transcribed.

• [18] On 20 January 2025, Mr Banson emailed Mr Fletcher a letter with the subject - Follow up request from formal meeting held 7.01.2025. The letter summarised Mr Fletcher's responses during the meeting, which assisted Gordon House to account for some of the "missing" money in the 2 reconciliation periods above. The letter asked Mr Fletcher to provide any other information and required a response before 28 January. The letter repeated that the organisation may take disciplinary action, up to and including termination of Mr Fletcher's employment.

• [19] On Monday 27 January 2025, Mr Fletcher emailed Mr Banson enclosing a medical certificate. The email said:

I was supposed to take sick leave from last week but there was too much to do with payroll, menu, etc. My mother is also unwell and I think it's best to lay low. Therefore, I'm not going to be in this week. I've sorted the rosters and HK [housekeeping].

• [20] The medical certificate covered the period from 22 January until 5 February 2025.

• [21] On 5 February 2025, Mr Fletcher said that Mr Banson called him while he was on sick leave. During that phone call, Mr Banson told Mr Fletcher that he would be dismissed. Mr Fletcher recalls that Mr Banson said, "We're letting you go. You're no longer working for us."

• [22] On 6 February 2025, Mr Banson emailed Mr Fletcher a letter terminating his employment. The termination letter reiterated the reasons from the 6 January 2025 invitation letter. Mr Fletcher's employment was terminated immediately but with a payment in lieu of notice.

• [23] During the determinative conference, Mr Banson confirmed that he had decided to terminate Mr Fletcher's employment while he was on sick leave because

...I was just of the impression that he's getting doctor's certificates because he can't answer the questions, and I made the call to terminate him whilst he was on sick leave.

• [24] Around 7 February 2025, Mr Fletcher sent an email to Mr Banson that was his written response to the allegations. Mr Fletcher said that he had "well and truly" written it but had not yet sent it because he was on sick leave.

• [25] As part of his employment, Mr Fletcher lived in one of the apartments owned by Gordon House. I note the termination letter made no reference to Mr Fletcher's living arrangements.

When may the Commission order an unfair dismissal remedy?

• [26] A dismissal can be unfair by being:[1]

• - Harsh: because of its consequences for the employee (personal and economic) or because dismissal was a disproportionate response to the gravity of the conduct or behaviour;
• - Unjust: because the employee did not engage in the conduct or behaviour;
• - Unreasonable: because it was decided on inferences that could not reasonably have been drawn from the material before the employer.

• [27] In considering whether a dismissal is harsh, unjust, or unreasonable, I must take into account the criteria in s 387 of the Act, to the extent that each is relevant to this matter. Section 387 says:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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.

Section 387(a) - Was there a valid reason?

• [28] A valid reason is one that is sound, defensible, and well founded, and not capricious, fanciful, spiteful, or prejudiced. A valid reason for dismissal may be based on conduct or capacity. Where dismissal relates to conduct, the Commission must be satisfied that the conduct occurred and that it justified termination. Capacity means the person's ability to do the job as required by the employer and includes the person's ability to do the work they were employed to do.[2]

• [29] Gordon House's reasons for dismissing Mr Fletcher relate to his capacity - namely, his performance. The termination letter dated 6 February 2025 set out the following reasons that the employer relied on to dismiss Mr Fletcher:

1. Cash reconciliation incomplete. $30,201.10 unexplained and unaccounted for period 22.02.2024 to 30.09.2024.
2. Cash reconciliation incomplete for period 01.10.2024 till 30.12.2024.
3. Unauthorised access to Lot 24, without owner, agent or [the employer's] consent to use location and change locks.

• [30] In his oral evidence, Mr Banson said that he considered the above to be performance reasons rather than conduct reasons, because they were demonstrative of Mr Fletcher needing assistance to perform his role. I am of the view that the first 2 reasons relate to performance (capacity), but the third reason is one of conduct.

• [31] Mr Fletcher raises a further matter, which is that he says he was unjustly dismissed for not responding to the employer's enquiries while on sick leave. I deal with this matter later.

• [32] Mr Fletcher's role at Gordon House was general manager of the café operations. Mr Banson says that he had intended to eventually hand over to Mr Fletcher the short stay letting side of the business. Mr Fletcher had previously held operations manager roles at other properties owned by associated entities of Gordon House.

• [33] In his role, Mr Fletcher was required to provide fortnightly summary of payroll as percentage of revenue. The purpose of this was to determine how the business was progressing because it was a new business that Mr Banson says he was operating at a loss.

• [34] Mr Fletcher does not dispute that the cash reconciliation issues were real. He appears to have taken Mr Banson's questioning about them as accusations of theft. Mr Banson was clear in his evidence and in the materials that he does not accuse Mr Fletcher of theft. Mr Banson's concern was that Mr Fletcher did not have the skill set to be a general manager, which was demonstrated by his inability to explain the financial discrepancy that resulted in significant amounts of money unaccounted for.

• [35] Mr Fletcher says he was never trained in how to perform end of month reconciliations and that the issues arose from issues with EFTPOS systems. Mr Fletcher explained that there was an inadequate cash management system and continual problems and breakdowns with an earlier EFTPOS system led to staff recording more sales as cash sales than was the case. Mr Fletcher also complained about the lack of cashflow and Mr Banson not paying creditors on time. This led to Mr Fletcher having to use his own credit card to make payments and staff paying suppliers from cash. Mr Fletcher acknowledged that there were no invoices for payments of flowers and ice, and so amounts could not be verified.

• [36] Mr Banson says that Mr Fletcher was experienced in running cafes, and his expectation was that Mr Fletcher would be able to reconcile daily takings.

• [37] Mr Banson put into evidence spreadsheets that show records of cash receipted not matching with cash deposited. Mr Banson also provided a spreadsheet that recorded cash payments, which did not account for the discrepancies.

• [38] I found Mr Banson to be frank and clear in giving evidence. In contrast, Mr Fletcher was aggrieved and accusatory, which was understandable as Mr Banson had dismissed him. Mr Fletcher's answers about the cash reconciliation reiterated that he had not been trained on end of month reconciliation, nor that he had information about turnover. Neither issue was relevant to the daily cash reconciliation nor general record-keeping that would have addressed the discrepancies or supported Mr Fletcher's arguments about how the discrepancies arose.

• [39] Mr Fletcher was aggrieved that his hard work in growing the business was not recognised. He said that he was a target, and the company wanted to get rid of him but there was no cogent evidence of that. Mr Fletcher also disagreed with the figures that Mr Banson had informed him were the discrepancies. Mr Fletcher also said that he could not answer Mr Banson's concerns because the figures changed throughout the period that Mr Banson questioned him about the discrepancies. However, the figures appear to have changed because, based on information provided by Mr Fletcher, Mr Banson was able to account for some, but not all, of the discrepancies.

• [40] I find that Mr Banson's concerns about Mr Fletcher's issues with cash reconciliation were valid reasons relating to Mr Fletcher's capacity to perform his job. Clearly, there were discrepancies. Mr Banson did not form a view the discrepancy resulted from Mr Fletcher's dishonesty, but rather that Mr Fletcher seemed unable to control or record the costs, and to manage the café in such a way as to become profitable. This was borne out from Mr Fletcher's responses during the determinative conference and in his response letter that he says was emailed to Mr Banson after his employment ended. Mr Fletcher may well have been very capable of running the café, but he simply did not appreciate nor seem concerned about how the finances did not balance nor his role or responsibility for that.

• [41] Mr Fletcher does not deny that he used the area that was Lot 24 prior to December 2024 and that he changed the locks in December 2024. He says that he was informed by Mr Banson that Gordon House had signed a lease, and so he believed he was authorised to do that. Mr Fletcher explained that the business had already been using the space that was Lot 24 prior to Gordon House signing the lease. Mr Fletcher described Lot 24 as a "generally accepted common area" and said that "the owners did not object to it [being used by the café] being that [the café staff] were the only ones maintaining the cleanliness of it and removing dumped items from residents who were dumping furniture there."

• [42] Mr Banson's and Mr Fletcher's evidence is in conflict about the lease and whether use of the area was authorised. Mr Banson's evidence is that he told Mr Fletcher that they had agreed terms, that Mr Banson had signed the lease but that the lease had not started yet. Mr Banson says that following Mr Fletcher's use of Lot 24 and changing the locks, the owners withdrew from negotiations about the lease. Mr Banson supplied an email from the owners, which included emails referred to below.

• [43] I prefer Mr Banson's evidence to Mr Fletcher's in relation to Lot 24. Mr Banson accepted that Mr Fletcher's actions were beneficial for the company and did not characterise the conduct as misconduct but considered that it formed part of Mr Fletcher's capacity to perform his job. Mr Fletcher's evidence that the owners did not object to the café's use of the area conflicts with the documentary evidence. In October 2024, the owners emailed Mr Fletcher about the café's use of the area asking that all items be removed. They clearly did not accept that it was a common area and had objected to the café using it. Mr Fletcher should have been aware of this, as the email was addressed to him.

• [44] I find that Mr Fletcher acted precipitously and therefore accessed Lot 24 without authorisation to do so, including changing the lock. It suited Mr Fletcher to do so and there was an immediate benefit to Gordon House. However, Mr Fletcher should have been aware that the owners of Lot 24 objected to the café's use of the area and should have proceeded more carefully than he did so as to ensure Gordon House's interests were properly protected, I am of the view that Mr Fletcher's actions in relation to Lot 24 formed a valid reason based on conduct.

• [45] Each of the above reasons alone do not justify dismissal. However, I find that when the reasons are considered together, the dismissal was justified by valid reasons."

Section 387(b)& (c) -Did Gordon House notify Mr Fletcher of the reasons and give him an opportunity to respond to the reasons?

• [46] These sections relate to procedural fairness. Section 387(b) requires that an employer must inform the employee of the reason for dismissal. Section 387(c) requires that notification must be before dismissal, so that the employee can respond before the decision to dismiss is made.[3] An employee must be made aware of the nature of the employer's concern and be given a full opportunity to respond to those concerns; procedural formality is not required.[4]

• [47] Mr Banson says that he started asking questions about the reconciliations in September 2024. He put into evidence emails where he asks Mr Fletcher questions about how Mr Fletcher banks cash and whether he keeps records of cash deposits. These emails date back to September 2024.

• [48] Mr Fletcher submits that there was a complete lack of procedural fairness. He submits that the termination letter was the "first and only reference to the alleged reason" for his dismissal and that it "falsely references a performance discussion on 7 January 2025 that never took place." Mr Fletcher also says that he was dismissed for not replying to one letter.

• [49] Mr Fletcher's submissions are not accurate.

• [50] The letter of 6 January 2025 invites Mr Fletcher to a meeting to discuss "Underperformance in role of General Manager of Gordon House Apartments." The letter sets out 3 allegations, which are repeated in the termination letter. In addition to the issues around cash reconciliations, the letter referred to the issue about Lot 24. Mr Fletcher said at the determinative conference that he understood that letter.

• [51] The discussion on 7 January 2025 occurred and was recorded and transcribed, and Mr Fletcher agreed during the determinative conference that the transcription was broadly accurate. Also, during the determinative conference, Mr Fletcher said that he thought the meeting was "just going to be another catch-up about strategy, growth, issues with housekeeping, payroll, just generalities that we would normally discuss." Mr Fletcher was aware that he had been discussing the cash reconciliation issue with Mr Banson; he said that "it had already been dealt with a number of times" and that he had "explained it in detail in previous meetings."

• [52] Gordon House sent Mr Fletcher a further letter on 20 January 2025 that repeated the allegations from 6 January 2025 letter and summarised Mr Fletcher's responses during the meeting of 7 January 2025 under each allegation. The letter then addressed how his responses accounted for some, but not all, of the discrepancies in each of the 2 periods. The letter invited him to provide further information, gave him a deadline for doing so and repeated that disciplinary action, including termination of employment, were potential outcomes.

• [53] Mr Fletcher also submitted that the employer concocted reasons to dismiss him, and he supported this by giving evidence that at least one other employee told him that the company wanted to get rid of him. This submission does not make logical sense with Mr Fletcher's submission that the dismissal came as a surprise. Given my findings about the employer's valid reasons for dismissing Mr Fletcher, I do not consider this submission relevant.

• [54] Despite the final paragraph of the letter of 6 January 2025, Mr Fletcher said that he "had no reason to think that there was any reason my job was in jeopardy" until Mr Banson called him on 5 February 2025 while he was on sick leave to tell him he was being fired. I do not find Mr Fletcher's submissions on this point credible. The letters of 6 and 20 January 2025 were explicit.

• [55] I am satisfied that Gordon House notified Mr Fletcher of their reasons for dismissing him and gave him an opportunity to respond to those reasons at the meeting on 7 January 2025 as well as a further opportunity when it invited him to provide any further information in the letter dated 20 January 2025.

Section 387(d) -Did Gordon House unreasonably refuse to allow Mr Fletcher to have a support person?

• [56] I am satisfied that there was no unreasonable refusal to allow Mr Fletcher to have a support person.

• [57] The Explanatory Memorandum to the Fair Work Act explains this provision:

This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.

• [58] Gordon House did inform Mr Fletcher that he could have a support person at the meeting on 7 January 2025. Mr Fletcher attended that meeting without a support person. That was his choice to do so.

Section 387(e) -Did Gordon House warn Mr Fletcher about unsatisfactory performance before dismissal?

• [59] As detailed above in relation to my considerations under s 387(b) and (c), I am satisfied that that Mr Fletcher was warned about his unsatisfactory performance in relation to the cash reconciliation matters.

• [60] Prior to the letter dated 6 January 2025, Mr Banson had been asking Mr Fletcher questions about cash reconciliations in emails from September 2024 and employed Ms James to assist Mr Fletcher. Mr Fletcher gave evidence that he worked regularly with Ms James on cash reconciliation and that he had discussed the discrepancies with Mr Banson for a couple of months, including in person, and had discussed a document about the discrepancies twice via Zoom videoconferencing.

Section 387(f) & (g) -What is the degree to which the size of Gordon House and absence of dedicated human resources management specialists impacted the procedures that were followed

• [61] Mr Banson gave evidence that there are 20 different private companies set up to manage specific assets (being accommodation), and that each company has a general manager. Mr Banson explained that the head company, Saltwater Properties, employees 7 or 8 employees in finance, sales, and marketing. The group of companies do not have dedicated human resource management specialist staff and general managers are responsible for human resource management with Mr Banson's assistance.

• [62] I find that this lack had an impact on the procedures that were followed, but it does not weigh greatly in favour nor against a finding that the dismissal was harsh, unjust, or unreasonable.

Section 387(h) -any other matters that the FWC considers relevant

• [63] Mr Fletcher submitted that he experienced bullying, harassment, and unprofessional conduct during the last 2 years of his employment by Mr Banson and 2 other senior management employees. He also submitted that he had faced continuous undermining of his professional integrity, that he made complaints about other staff members, and raised misconduct allegations about another staff member in December 2023.

• [64] I do not have much more than assertions that Mr Fletcher experienced bullying, harassment, and unprofessional conduct. That he may have does not alter his appropriate concessions about the discrepancies in the cash reconciliation for 2 periods in 2024 nor his actions in relation to Lot 24. Similarly, his complaints about other staff members and the misconduct allegations of December 2023 are not relevant to Mr Fletcher's dismissal for reasons that I have found to be valid.

• [65] Mr Fletcher also submits that there is unfairness in the employer's dismissal of him when it did not act upon his complaints and misconduct allegations that he raised. However, he also gave evidence that he accepted a change in location to removed him from the pressure and harassment of other staff members. It therefore appears that the employer did act upon his complaints. Further, the complaints and misconduct allegations are not materially similar to the reasons for Mr Fletcher's dismissal. There is no relevant disparity in treatment by the employer. I am not satisfied that these matters are relevant to Mr Fletcher's dismissal.

• [66] Mr Fletcher was aggrieved by being dismissed while he was on sick leave.

• [67] Mr Banson gave evidence that he "made the call to terminate [Mr Fletcher] while he was on sick leave," because he got the impression that Mr Fletcher was continuing to get doctor's certificates because he could not answer Mr Banson's questions.

• [68] An employer can dismiss an employee while they are on leave but not because they have taken the leave (see s 352 of the Act). Mr Banson's evidence is clear that Mr Fletcher being on sick leave was factored into his decision making about the timing of dismissal. He did not inform Mr Fletcher of his suspicions or give Mr Fletcher an opportunity to respond.

• [69] This does weigh in favour of a finding of the dismissal being unjust, as Mr Fletcher did not get the opportunity to explain to Mr Banson that he was genuinely unwell rather than that he was avoiding the issues raised by Mr Banson. However, Mr Fletcher's response (which he said was prepared prior to his dismissal and sent immediately after his dismissal) replicated the responses he had already provided during the meeting of 7 January 2025. Ultimately, an opportunity to respond to Mr Banson's further suspicion about the reasons for Mr Fletcher being off work may have - at most - delayed the dismissal. I do not consider that this factor weighs so greatly in favour of a finding that the dismissal was unjust as to outweigh the factors discussed above.

• [70] Having taken into account all the factors in s 387, I am satisfied that Gordon House's dismissal of Mr Fletcher was not harsh, unjust, or unreasonable. While the dismissal did occur during a period when Mr Fletcher was on sick leave, I consider that the employer had valid reasons relating to performance and conduct to dismiss Mr Fletcher. I am also satisfied that the employer notified Mr Fletcher of its reasons and provided Mr Fletcher with opportunities to respond to those reasons. I am also satisfied that the employer warned Mr Fletcher about his unsatisfactory performance.

• [71] I order that the application for an unfair dismissal remedy under matter number U2025/1780 filed by Mr Nicholas Fletcher on 13 February 2025 be dismissed.

[1] As summarised by Ross VP (as he then was) in Stewart v University of Melbourne (U No 30073 of 1999 Print S2535).

[2] see Austin v Sandgate Taphouse Pty Ltd T/A Sandgate Post Office Hotel [2024] FWCFB 323 at [52]

[3] Crozier v Palazzo Corporation Pty Ltd t/as Noble Park Storage and Transport Print S5897, [(2000) 98 IR 137] at [70]- [73]

[4] RMIT v Asher [2010] FWAFB 1200 at [26], citing Gibson v Bosmac Pty Limited [1995] IRCA 222; (1995) 60 IR 1 at 7

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