s.394 - Application for unfair dismissal remedy

[1] Mr. Rujiang Wen has applied under s.394 of the Fair Work Act 2009 (Cth) (Act) for an unfair dismissal remedy. Mr Wen was employed by his former employer, Sydney VIP Blinds Pty Ltd (respondent) from 2020 until his dismissal on 6 August 2025. Mr. Wen was dismissed for alleged poor performance. He claims his dismissal was harsh, unjust or unreasonable. He seeks financial compensation as a remedy.

[2] The respondent opposes the application and says that there was a valid reason for the termination of the applicant's employment and that the applicant was accorded procedural fairness at the time his employment came to an end.

[3] Section 390 of the Act provides that the Commission may order a person's reinstatement or the payment of compensation to a person if satisfied the person was protected from unfair dismissal at the time of the dismissal and the person has been unfairly dismissed. Section 382 provides that a person is protected from unfair dismissal if the person is an employee who has completed the minimum employment period and the person is covered by a modern award, an enterprise agreement applies to the person, or the person earns less than the high-income threshold. It was not in issue, and I am satisfied that the applicant is protected from unfair dismissal for the purposes of s.382.

[4] Section 385 provides that a person has been unfairly dismissed if the Commission is satisfied of four matters: the person has been dismissed, the dismissal was harsh, unjust or unreasonable, the dismissal was not consistent with the Small Business Fair Dismissal Code (Code) and the dismissal was not a case of genuine redundancy. It was not contested, and I am satisfied that the applicant was dismissed, that the respondent employed more than 15 people and so the Code has no application and that the dismissal was not a case of genuine redundancy. The issue for determination is whether the dismissal was harsh, unjust or unreasonable. In deciding that question, the Commission is required to have regard to the matters in s.387 which provides as follows:

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.

Note: For the purposes of paragraph (a), the following conduct can amount to a valid reason for the dismissal:

(a) the person sexually harasses another person; and

(b) the person does so in connection with the person's employment.

[5] The applicant worked for the respondent principally in the role of installing roller blinds, curtain tracks, shutters, fly screens, security windows and related products. He also performed work in the respondent's factory.

[6] The applicant denied that there were any performance issues associated with his work or that performance issues had been raised with him during his employment.

[7] The respondent contended that the applicant had significant performance issues over the course of his employment including leaving protruding screws on products and failing to properly secure the product that was being installed. The respondent maintained that this posed a safety risk for customers and that the applicant had been verbally instructed on the procedures to be followed but had continued to perform the installation works with defects and potential safety hazards. The respondent said that the applicant's employment was terminated on 6 August 2025 following a customer complaint about workmanship and an allegation that the applicant had required the customer to carry materials for him while he was undertaking his work.

[8] The respondent relied on WeChat communications between the respondent's director, Mr. Xiang, and the installers, including the applicant. These consisted of six exchanges between the period from October 2022 to May 2025. They included criticism of the applicant's work by Mr. Xiang, photographs of alleged defective work performed by the applicant and questions to the applicant from Mr. Xiang as to how problems with the applicant's work had occurred.

[9] The respondent also provided a list of alleged defects with the applicant's work for the period January to August 2025. The list was compiled after the termination of the applicant's employment.

[10] In cross-examination the applicant denied that there were legitimate performance issues with his work. He contended that the WeChat messages were no more than informal group discussions where installers compared jobs and product issues. He said they did not constitute performance counselling and that the messages relied on were sporadic and lacked any proximity to his dismissal. The applicant said in cross-examination that he did not read the WeChat messages. The applicant was equivocal in cross-examination but appeared to ultimately accept that he had been told by Mr. Xiang that future work was to be done in a particular way as opposed to the way it had previously been performed by the applicant. The applicant disputed the list of alleged defects in his work in the 2025 period claiming that many of the issues were unrelated to his workmanship but rather reflected a product fault for which he was not responsible.

[11] Mr. Xiang gave evidence that the list of defects demonstrated that in 2025 some 28 installations carried out by the applicant required follow-up rectification work by the respondent. He also said that he went to various sites on numerous occasions to show the applicant how tasks were to be properly performed.

[12] Having observed the witnesses and taken into account the totality of the evidence, I am satisfied that there were real and ongoing issues with the applicant's work performance. Despite the applicant's denials, I accept Mr. Xiang's evidence as to the 2025 list of defects and rectification work noting that it was compiled by Mr. Xiang after the dismissal took effect. The evidence about this defective work was not seriously undermined in cross-examination. I also accept Mr. Xiang's evidence that he had spoken to the applicant about problems with his work and instructed him about how the work was to be done in the future. The WeChat messages are of less assistance but do confirm that there was dissatisfaction expressed contemporaneously by the respondent on more than one occasion about the standard of the applicant's work. The applicant acknowledged that he was part of the WeChat group. Overall I am satisfied on the evidence that there issues with the applicant's work performance and that there was a valid reason for the dismissal relating to the applicant's capacity to perform his work.

[13] The applicant's employment was terminated shortly after the respondent received a customer complaint about the applicant's work. The termination was not communicated initially to the applicant by Mr. Xiang who was the person who made the decision to bring the applicant's employment to an end. Mr. Xiang instructed another employee to tell the applicant that he was no longer required. That employee was not called to give evidence. The evidence as to what was said to the applicant was limited. There was no written notice of termination. Mr. Xiang gave evidence in cross-examination to the effect that he spoke with the applicant about the customer complaint in early August that ultimately resulted in his termination and the applicant had said that the customer had volunteered to assist him. Mr. Xiang accepted that the decision to terminate the applicant was made immediately after the customer complaint. It was unclear from Mr. Xiang's evidence precisely when the conversation with the applicant occurred and how proximate it was to the applicant's dismissal. In any event I am not satisfied on the evidence that the respondent ever conveyed to the applicant that the performance issue raised by the August complaint was the reason or a reason for the termination.

[14] Nor is there any basis to conclude that the applicant was notified that the reason for the termination was the previously raised performance issues. The applicant said, and I accept, that he was simply told verbally by the respondent's accountant not to return to work and not given any reason for the dismissal. He then said Mr. Xiang told him that he did not need to come to work anymore or 'don't ever come back'. I conclude that the applicant was not notified of the valid reason for the termination.

Whether the applicant was given an opportunity to respond to any reason related to capacity or conduct

[15] As the applicant was not notified of the reason, I conclude that he was not given an opportunity to respond to the reason related to his capacity.

Any unreasonable refusal by the employer to have a support person present to assist in any discussion relating to dismissal

[16] The applicant was not notified that there was to be a discussion about his dismissal and did not request a support person at the time of the discussion. There was no unreasonable refusal because there was no request.

If the dismissal related to unsatisfactory performance whether the applicant had been warned about that unsatisfactory performance prior to the dismissal

• [17] The applicant denied that he had previously been warned, either verbally or in writing,[1] about unsatisfactory performance.[2] I do not accept that to be the case. The respondent accepted that there were no formal written warnings issued to the applicant but relied on the WeChat exchanges to show that the respondent was dissatisfied with the applicant's work and the applicant must have at least been on notice that his performance was in question. I agree with the applicant that the WeChat messages do not rise to the status of a formal written warning. It is unlikely that the applicant would have taken from the messages that his ongoing employment was at risk. However, Mr. Xiang gave evidence about a series of verbal warnings he delivered to the applicant in 2025 about his performance. This evidence was not seriously undermined in cross-examination.

[18] The applicant submitted that the dates of the alleged verbal warnings did not align with the respondent's own list of the applicant's defective work. In fact, there is a large degree of alignment between the two pieces of evidence. For example, Mr. Xiang said there was a verbal warning about falling roller blinds on 7 February 2025. The list of defects records that the applicant performed a job on 22 January 2025 that involved falling roller blinds. There was evidence of a verbal warning about a falling fly screen on 15 March 2025 and the list records rectification work of that kind being undertaken on the same day. Mr. Xiang said that there was a warning given about protruding nails on 12 April 2025. The list records that the applicant performed work on 5 April 2025 that required rectification work to address that issue on 12 April 2025. Further, Mr. Xiang said that there were verbal warnings given about protruding nails on 20 and 31 May 2025. The list records that the applicant performed work on 16 May 2025 and that the job required rectification work relating to exposed nails that was carried out on 31 May 2025. I am satisfied that the applicant was issued with verbal warnings about his performance in the period February to May 2025 and that his dismissal related at least in part to the unsatisfactory performance in this period.

Size of the employer's enterprise/absence of human resources expertise and the impact on procedures followed in effecting the dismissal

[19] The respondent employed 17 employees at the time of the applicant's dismissal. There was no evidence to suggest that the respondent had or used specialist human resource expertise in effecting the dismissal. It is likely that a larger enterprise with specialist resources would have adopted different procedures to effect the dismissal including formalised disciplinary and/or performance management processes, clear written reasons and a formal meeting with the applicant to discuss termination before it was implemented. Nonetheless employees, including those of small to medium sized businesses, are entitled to receive procedural fairness during disciplinary and dismissal processes. I have taken these matters into account in the assessment of whether the dismissal was ultimately harsh, unjust or unreasonable.

[20] I have also taken into account the applicant's length of service with the company, his age and limited English language skills. These are matters of which the respondent would have been aware at the time the decision was made to summarily dismiss the applicant. The latter two matters compound the negative impact of summary dismissal on the applicant.

[21] Taking all of the above matters into account, I am satisfied that the dismissal of the applicant was harsh, unjust and unreasonable. Even though there was a valid reason for the termination, the processes that were adopted were deficient. The applicant was not told why he was being dismissed and was not given a reasonable opportunity to give his response before the decision was made and the dismissal effected. I conclude that the applicant was unfairly dismissed for the purposes of s.385 of the Act.

• [22] The applicant did not seek reinstatement. I accept that reinstatement is not an appropriate remedy in this case and consider that it is appropriate to make an order for the payment of compensation.[3] In order to determine the amount of compensation to be paid I am required to have regard to the matters set out in s.392 of the Act and I have considered each of those matters. There was no evidence that an order would have an impact on the viability of the respondent's business and I would make no deduction from the amount of compensation on that account. The applicant had been employed with the respondent since 2020 which is a reasonably lengthy period.

[23] In determining the remuneration that the Applicant would have received or would have been likely to receive if he had not been dismissed, I take into account the fact that the applicant had been the subject of customer complaints and numerous verbal warnings about his performance in 2025. I am of the view that even if the applicant had been formally counselled and warned there was a real likelihood that the work issues would have been repeated and the applicant's employment would not have endured for an extended period beyond the date of his termination. I think it is unlikely that the applicant would have remained in the employment of the respondent beyond a further four weeks had his employment not been terminated when it was.

[24] There was nothing put by the applicant in relation to attempts to mitigate his loss although I have noted the applicant's age and lack of English language proficiency may contribute to difficulties in obtaining suitable alternative employment. I nonetheless consider it appropriate to reduce the proposed amount of the order on account of lack of mitigation efforts.

• [25] There was no evidence of any remuneration being earned by the applicant from employment or other work during the period between the dismissal and the making of the order and I note that any income reasonably likely to be earned from employment or other work after the making of the order would not relate to the anticipated period of employment.[4]

[26] There was no evidence of misconduct and the amount of compensation should not be reduced on this account.

• [27] The well-established approach to the assessment of compensation under s.392 is to apply the "Sprigg formula". This is a reference to the approach adopted by the Full Bench of the former Australian Industrial Relations Commission in Sprigg v Paul's Licensed Festival Supermarket[5] which involved consideration of compensation under similar provisions in predecessor legislation. The application of that formula in the context of the current legislation has been explained in numerous matters since.[6]

[28] The first step is to consider what remuneration the applicant would have received or would have been likely to receive if he had not been dismissed. This requires an assessment of how long the applicant would have remained employed by the respondent and the remuneration he would have earned and necessarily involves an element of speculation. As referred to above, the performance issues with the applicant meant that even though he had been employed since 2020 I think it unlikely that he would have remained employed beyond a further 4 weeks even if the respondent had followed different performance management and termination processes. The applicant was paid an amount of $39 per hour. He said that he worked approximately 60 hours per week. This was disputed by the respondent, but the respondent provided no evidence as the applicant's working hours. In the circumstances, I propose to direct the parties to confer to ascertain what the applicant's average weekly earnings were in the six months prior to the termination of his employment and use that figure as the basis for calculating the weekly figure, to be multiplied by four, and the final amount payable taking into account the reduction referred to below.

[29] As there was no evidence of earnings by the applicant post-termination there should be no deduction on that basis however it is appropriate in this case to reduce the amount of compensation by 10% on account of the lack of evidence as to mitigation efforts by the applicant. I do not propose to discount the amount on account of contingencies.

[30] The gross amount payable should be taxed in the usual way. Superannuation contributions at the statutory rate of 12% of the amount payable should also be paid by the respondent.

Having regard to the circumstances as a whole, I do not consider an amount calculated in accordance with the above would be clearly inadequate or clearly excessive. I propose to give the parties 7 days to confer and agree on the amounts referred to above. In the absence of agreement, the matter will be relisted for the purpose of finalising the terms of an order.

Mr M Wang, of Longton Blackwell, on behalf of the respondent

[4] Ellawala v. Australian Postal Corporation Print S5109 at [34] and following.

[5] [1998] AIRC 989; (1998) 88 IR 21.

[6] See for example Double N Equipment Hire Pty Ltd t/as A1 Distributions v. Humphries [2016] FWCFB 7206.

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