s.394 - Application for unfair dismissal remedy

Application for relief from unfair dismissal - dismissal unfair - compensation ordered.

[1] Ms Small was employed by Sharp N Stylish Pty Ltd as a hairdresser. Her superannuation had not been paid for a considerable period of time and she was being paid less than the applicable award rate of pay. Following raising issues with Sharp about her pay, Ms Small gave four weeks' notice of her resignation from her employment on 25 November 2025. The next day Ms Small was summarily dismissed.

[2] For the reasons explained below, I am satisfied that Ms Small was unfairly dismissed and should be awarded compensation.

[3] I conducted a determinative conference in this matter on 30 March 2026. Ms Small attended the conference with her support person. There was no appearance by or on behalf of Sharp. That was not surprising given that Sharp had not filed a response or taken part in any other way in these proceedings. I am satisfied that Sharp was notified of the proceedings and the fact that the matter was listed for a determinative conference in the Fair Work Commission in Newcastle on 30 March 2026. A copy of the notice of listing for the determinative conference, the directions I issued on 16 March 2026, and the application filed by Ms Small, was sent to both the trading address and registered address of Sharp.

[4] As to the initial matters set out in section 396 of the Fair Work Act 2009 (Cth), I am satisfied that:

(a) Ms Small's application was made within the period required in s 394(2) of the Act;

(b) Ms Small was protected from unfair dismissal. She was employed by Sharp as a full-time employee from about February 2020 until her dismissal on 26 November 2025;

(c) Although Sharp operated a small business at the time of Ms Small's dismissal, there is no basis in the material before the Commission find that Ms Small's dismissal was consistent with the Code; and

(d) Ms Small's dismissal was not a genuine redundancy.

Was the dismissal harsh, unjust or unreasonable?

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

Valid reason (s 387(a))

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

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

• [8] Capacity is the employee's ability to do the job as required by the employer.[6] Capacity also includes the employee's ability to do the work they were employed to do.[7] The appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively.[8]

• [9] It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason.[9] The employer bears the evidentiary onus of proving that the conduct on which it relies took place.[10]

• [10] The Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred or the performance was satisfactory.[11]

• [11] In cases where allegations of serious misconduct are made, the Briginshaw standard applies so that findings that a person engaged in the misconduct alleged are not made lightly.[12]

• [12] In cases involving alleged misconduct, a reason for dismissal would be valid if conduct occurred and it justified termination. There would not be a valid reason for termination if the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour).[13]

• [13] On 21 November 2025, Ms Small sent an email raising concerns about her pay rate with Sharp.[14]

• [14] At 9:48am on 25 November 2025, Ms Small sent an email to the owner of Sharp, Ms Hollie Lobb, giving four weeks' notice of her resignation.[15] The four week notice period was due to expire on 23 December 2025.

[15] Ms Small worked her normal day at Sharp's salon on 25 November 2025.

[16] At about 9am on 26 November 2025, Ms Small had a discussion with Ms Lobb about her resignation. Ms Lobb accused Ms Small of effectively trying to drive a wedge between Sharp and its employees by communicating with another employee about information not being provided by Sharp to permit employees to prepare their tax returns for the previous financial year. Ms Lobb then said to Ms Small, "Get the fuck out of my salon. I am glad you are leaving."

[17] Ms Small left Sharp's salon after her conversation with Ms Lobb on the morning of 26 November 2026. An employee of Sharp put together Ms Small's personal items for collection by Ms Small's father later that day.

[18] Between 10:20am and 12:34pm on 26 November 2026, Ms Lobb and Ms Small exchanged the following text messages:

This letter is being written because the situation needs clarity, calmness and honesty. It's important that the full picture is understood - the history, the support, the trust, and the impact of everything that has recently unfolded.

Over the years, an extraordinary amount of belief, patience and support has been extended to you, far beyond what most workplaces or even friendships would ever offer. You were shown understanding during difficult periods and compassion through personal challenges. There were many times where reliability and consistency weren't steady, yet the support remained. Your apprenticeship stretched over five years because of inconsistency, and even with missed trainings, meetings and responsibilities, you were still met with patience rather than consequences.

Generosity was given to you in many forms, both personal and professional. Extra paid time off was approved, cash was given at different times when you needed it, and bonuses and financial help were offered without hesitation. You received free services, free products, tools, resources, lunches, dinners, and nights out. A personal car was lent to you for months. Courses and education were paid for, including several that you didn't end up attending. Industry opportunities, events, and experiences were opened up to you because someone believed in you and wanted you to grow. The amount of trust, time and energy that went into supporting you was significant.

Your level of trust within the salon was incredibly high. You had keys, confidential access, and insight into personal areas of life that very few people are invited into. The intention behind all of it was always to make you feel supported, valued and included.

Outside the salon, the support extended even further. You were given a place to stay, a stocked fridge, clothes, dinners, services and countless gestures of care. Everything was done with the hope of helping you feel safe and stable.

With all of this history, hearing negative comments and disrespect directed back toward the owner was extremely hurtful. It wasn't just the words themselves, but the break in trust after so much loyalty, generosity and opportunity had been given. It created a level of sadness and disappointment that cannot be ignored. This isn't the first time concerns like this have come up, and that only adds to the hurt. There are many things known but never spoken about, simply out of respect for your privacy. That respect was upheld even when it wasn't shown in return.

The salon is growing and evolving. Moving forward, the environment must be one built on honesty, respect and loyalty. Negative energy or comments cannot continue in a space that relies on trust and teamwork.

This letter isn't written to attack you. It is written because the emotional impact has been real, and the situation needed to be addressed with honesty and dignity. The support you've received, the chances you've been given, the trust that was extended to you and the effect of recent actions all matter in this moment.

The intentions behind the support have always been good ones, and the hope has always been for you to succeed, grow and feel included. But recent behaviour has made it unclear where your loyalty now stands, and that uncertainty can't continue in a professional or personal space.

Moving forward, the focus needs to shift toward boundaries, respect and maintaining a healthy and positive environment within the salon.

• Log out of all Sharp n Stylish accounts and passwords.

• Remove all details of my business card from your devices and accounts.

• Remove any connection you have to the Sharp n Stylish Instagram or any other salon platforms.

• If you access anything related to Sharp n Stylish from this point forward, you will be held accountable.

• I also need your current address, as you did not collect your tools and they will need to be returned.

"Kisra has informed me that your dad is planning to come to the salon.

Please note that neither you nor anyone associated with you is permitted on-site or within my salon space.

Your tools will be returned to your parents' doorstep after I finish work this evening.

I would also like my shop key returned without delay.

Any false or damaging statements made about me or my business will be taken seriously, and you will be held accountable for the impact of that behaviour.

In addition to this, I require written confirmation from you stating that you wish to leave."

As per my resignation letter (emailed to hollie@sharpnstylish.com.au 25/11/2025 and mentioned to you this morning), I gave my four weeks notice. Subsequently at the conclusion of our meeting this morning, you told me to "get the fuck out of your salon", have told me to immediately remove any affiliation of myself and Sharp n Stylish and remove myself from all systems and communication platforms, and had me remove my tools and equipment from the salon.

I have taken this as a clear indication that I have been summarily dismissed and you do not intend for me to serve out my notice period, as all means required for me to perform my job function have been removed and it is clear that I do not have a safe work environment available to continue on regardless.

I will send the salon key via registered express post as you have also indicated that myself or "anyone affiliated with me" is not welcome at the salon.

"After speaking negatively about the salon owner to other team members, you were formally warned. That meeting addressed your conduct and the expectations moving forward.

I do not owe you anything further, nor am I required to have you in my salon space. Your presence in the salon is at my discretion, and due to your behaviour, you are no longer permitted on site.

I'm entitled to not want you here as you are not nor a manager I trust."

"You can create whatever story you want for the people around you, but the truth is simple: you have done the wrong thing, and your loyalty is no longer with the salon.

I will not tolerate this behaviour, nor will I accept any more dishonesty. I have genuinely reached my limit.

Return key we have no need to be in contact. I will you all the best."

[19] It is clear from the oral and text message communications from Ms Lobb to Ms Small on 26 November 2025 that Sharp summarily terminated Ms Small's employment on that day.

[20] On the material before the Commission, there was no sound, defensible or well-founded reason for the termination of Ms Small's employment. Ms Small had raised an issue about her rate of pay. She had also communicated with another employee about an absence of documentation from Sharp to permit Ms Small to complete her tax return. They were appropriate matters for Ms Small to raise. Ms Small then gave four weeks' written notice, on 25 November 2025, of her resignation. Ms Small had not received a warning about her performance or conduct during her employment with Sharp. The material before the Commission does not establish any valid reason for the termination of Ms Small's employment on 26 November 2025.

Was Ms Small notified of the reasons for her dismissal and given an opportunity to respond (s 387(b)&(c))?

[21] It is necessary to consider and take into account whether Ms Small was notified of any valid reason(s) for her dismissal and whether she was given an opportunity to respond to any reason(s) related to her capacity or conduct.

[22] In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):

"As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted."

• [23] The criterion concerning whether an employee was provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity should be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.[16]

[24] There was no valid reason for Ms Small's dismissal. It follows that she was not notified of a valid reason, nor was she given an opportunity to respond to any reason related to her capacity or conduct.

Was there an unreasonable refusal to allow Ms Small to have a support person present (s 387(d))?

[25] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, it is relevant to consider and take into account whether the employer unreasonably refused the support person being present.

[26] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:

"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."[17]

[27] I am satisfied that there was no unreasonable refusal by Sharp to allow Ms Small to have a support person present to assist at any discussions relating to her dismissal.

Warnings about unsatisfactory performance (s 387(e))

[28] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.

[29] No warnings were given to Ms Small about unsatisfactory performance.

Impact of size of Sharp's business and absence of dedicated human resource management specialists or expertise on procedures followed in effecting the dismissal (s 387(f)& (g))

[30] Sharp is a small business employer. It does not seem to have any human resource management specialists or expertise. However, these matters do not excuse a complete absence of procedural fairness, which is what Ms Small experienced in the present case.

Other relevant matters (s 387(h))

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

[32] Ms Small worked for Sharp for almost 6 years. She did not receive any warnings about her performance or conduct. That Ms Small had relatively long and unblemished record of employment with Sharp supports Ms Small's argument that her dismissal was harsh.

[33] After considering and taking into account each of the matters specified in section 387 of the Act, my value judgment is that Sharp's dismissal of Ms Small was harsh, unjust and unreasonable. Ms Small was summarily dismissed after she had given four weeks' notice of her resignation. There was no proper basis to summarily terminated Ms Small's employment on 26 November 2025. Nor was there a valid reason for Ms Small's dismissal. Further, she was not afforded procedural fairness in connection with her dismissal.

[34] Having regard to all the circumstances, I am satisfied that reinstatement would be inappropriate in this case. It is clear from Ms Small's evidence that it would not be possible for her to have a viable and productive working relationship with Ms Lobb.

• [35] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied.[18]

[36] Having regard to all the circumstances of the case, including the fact that Ms Small has suffered financial loss as a result of her unfair dismissal, I consider that an order for payment of compensation to her is appropriate.

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

• [38] In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was set out in Sprigg v Paul Licensed Festival Supermarket and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases.[19] The approach to calculating compensation in accordance with these authorities is as follows:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

Remuneration Ms Small would have received, or would have been likely to receive, if she had not been dismissed (s 392(2)(c))

• [39] Like all calculations of damages or compensation, there is an element of speculation in determining an employee's anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed.[20]

[40] Having regard to Ms Small's almost 6 year period of employment with Sharp, I am satisfied that if she had not been summarily dismissed on 26 November 2025, she would have remained in employment with Sharp until the conclusion of her four week notice period on 23 December 2025.

• [41] If Ms Small had remained employed by Sharp from 26 November 2025 to 23 December 2025, I am satisfied that she would have worked her usual hours of about 45 per week, including about 6 hours on a Saturday. It follows that the remuneration Ms Small would have received, or would have been likely to receive, if she had not been dismissed would have been $4,278 gross (4 weeks x $1,069.50/week (39 x $23/hr[21] + 6 x $28.75hr[22] on Sat = $1,069.50/week)) plus $513.36 superannuation.

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

[42] Ms Small commenced work in her new employment on 9 December 2025. In that new job, Ms Small earned $3,021.38 gross plus superannuation of $362.57 in respect of the period between 9 December 2025 and 23 December 2025.

• [43] It follows that Ms Small has suffered a loss of $1,256.62[23] gross plus $150.79[24] superannuation as a result of being summarily dismissed on 26 November 2025, rather than working with Sharp until the conclusion of her four week notice period on 23 December 2025.

Any other relevant matter (s 392(2)(g))

• [44] It is necessary to consider whether to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which Ms Small was subject might have brought about some change in earning capacity or earnings.[25] Positive considerations which might have resulted in advancement and increased earnings are also taken into account. Ordinarily, the discount for contingencies is only applied in respect to an "anticipated period of employment" that is not actually known.[26]

[45] In the present case, there is no "anticipated period of employment" that is not actually known. That is, the evidence discloses the remuneration Ms Small received in the four week period following her dismissal. In the circumstances, therefore, I will not discount the remaining amount for contingencies.

[46] Save for the matters referred to above, there are no other matters which I consider relevant to the task of determining an amount for the purposes of an order under s 392(1) of the Act.

[47] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.

Viability (s 392(2)(a))

[48] No submission was made nor was any evidence adduced on behalf of Sharp, that any particular amount of compensation would affect the viability of Sharp's business. No adjustment will be made on this account

Length of service (s 392(2)(b))

[49] In all the circumstances, I consider that Ms Small's period of service with Sharp (almost 6 years) does not in all the circumstances justify any increase or reduction to any amount of compensation otherwise calculated.

Mitigation efforts (s 392(2)(d))

[50] I am satisfied that Ms Small acted reasonably to mitigate her loss. She found alternative employment quickly and commenced in her new job on 9 December 2025.

Misconduct (s 392(3))

[51] Section 392(3) of the Act provides that if the Commission is satisfied that misconduct of a person contributed to the employer's decision to dismiss the person, the Commission must reduce the amount it would otherwise order under s 392(1) of the Act by an appropriate amount on account of the misconduct.

[52] On the material before the Commission, I am not satisfied that Ms Small engaged in any misconduct.

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

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

Compensation cap (s 392(5)-(6))

[54] The amount of $1,256.62 gross plus $150.79 superannuation is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which Ms Small was entitled in her employment with Sharp during the 26 weeks immediately before her dismissal. In those circumstances, I am satisfied that there is no basis to reduce the amount of $1,256.62 gross plus $150.79 superannuation reason of s 392(5) of the Act.

Instalments (s 393)

[55] No application was made by Sharp for any amount of compensation awarded to be paid in the form of instalments.

[56] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate.

[57] For the reasons I have given, I am satisfied that a remedy of compensation in the sum of $1,256.62 gross plus $150.79 superannuation in favour of Ms Small is appropriate in the circumstances of this case. I will issue an order PR798171 to that effect.

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

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

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

[7] Webb v RMIT University [2011] FWAFB 8336 (Drake SDP, Hamilton DP, Jones C, 8 December 2011) at [6]

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

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

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

[13] Sydney Trains v Hilder [2020] FWCFB 1373 at [26(3)]

[16] RMIT v Asher [2010] FWAFB 1200; (2010) 194 IR 1 at 14-15

[17] Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].

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

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

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

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

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

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