Fair Work Act 2009

s.394 - Unfair dismissal

Application for relief from unfair dismissal - dispute between legal guardian of employee and employer - valid reason for dismissal - no procedural fairness issues - dismissal harsh due to employee's personal circumstances - reinstatement ordered effective 1 July 2025 with continuity of service but no compensation.

• [1] Muaz Khan (Muaz) commenced part-time employment with Step Up Disability Services Pty Ltd (Step Up) on around 30 August 2022 as an Assistant Mentor.[1] Muaz worked under the Supported Wage System (SWS) with a productivity assessment of 60%. Muaz worked eight hours per week. I have previously determined that Muaz was dismissed by Step Up on 1 September 2024.[2] Zaffar Khan is Muaz's father and legal guardian. Muaz was dismissed following a dispute between Mr Khan and Step Up over the signing of a new Services Agreement. Mr Khan filed an unfair dismissal application on behalf of Muaz on 22 September 2024. This decision concerns the merits of Muaz's unfair dismissal application and, if necessary, what remedy should be ordered.

• [2] I listed a hearing for 24 March 2025 via video. Mr Khan represented Muaz at the hearing. Amy Lee (Operations Manager) represented Step Up.

• [3] The parties filed a considerable number of documents in support of their positions. The documents contained a mixture of evidence and submissions. I marked the documents filed by Mr Khan collectively as Exhibit A1.[3] Mr Khan was not required for cross-examination. I marked the documents filed by Step Up collectively as Exhibit R1.[4] Ms Lee was not required for cross-examination.

• [4] I have reviewed all the evidence and submissions filed by the parties. I do not consider much of the material to be overly relevant to the issues I need to determine. I consider the critical evidence is captured in Muaz's employment contract and the emails sent between Step Up and Mr Khan regarding the signing of a new Service Agreement in August 2024.

• [5] Muaz's part-time employment contract is dated 19 January 2023. The contract refers to Muaz's employment commencing on 3 January 2023. However, it appears the employment commenced prior to that date without the existence of a written employment contract.[5] The contract states Muaz's duties and responsibilities are set out in a Job Description and that Muaz would be required to "carry out other duties reasonably required by Step Up Disability Services that you are skilled and capable of performing."

• [6] A series of emails were exchanged between Step Up and Mr Khan from 19 July 2024 to 31 August 2024.

• [7] Following an increase in National Disability Insurance Scheme (NDIS) fees on 1 July 2024, Step Up sent an email to Participants, Parents, and Support Coordinators on 19 July 2024.[6] The email contained new support rates to commence for existing participants on 1 August 2024. The email also referred to a need to sign a new Service Agreement for participants who have an outdated existing Service Agreement.

• [8] Mr Khan sent an email to Step Up dated 31 July 2024.[7] Mr Khan's email questioned whether Step Up was helping Muaz with Job Support and complained that Muaz's wages are subsidised, but he is never acknowledged for the work he puts in. The email ends with Mr Khan requesting a thorough written response.

• [9] Step Up responded to Mr Khan's email on 2 August 2024.[8] The email contained an apology for any misunderstanding about the Program's objectives. The email contained information about the purpose of the Employment Support Program and about the engagement of Assistant Mentors. The email stated the charges are for Employment Support services associated with Muaz's employment including planning, training, job allocation, supervision, and administration associated with the SWS.

• [10] Step Up sent a further email to Mr Khan dated 5 August 2024.[9] The email states Muaz's Service Agreement is outdated and Step Up will be sending a new Service Agreement for Mr Khan to sign.

• [11] Mr Khan sent an email in response later in the day on 5 August 2024.[10] Mr Khan stated he wanted to speak to someone before he signed anything. Mr Khan queried whether he was being asked to sign a new Services Agreement because he had raised concerns about NDIS fees. Mr Khan expressed dissatisfaction with the response to his concerns and requested an appropriate contact person to speak with. Mr Khan requested a comprehensive reference letter for the work performed by Muaz to date. Mr Khan indicated that if there were any repercussions for Muaz in response to the concerns he was raising he would leave "no stone unturned to advocate for him."

• [12] Step Up responded to Mr Khan's email on 7 August 2024.[11] The email stated Step Up was happy to provide further information about the new Services Agreement. The email explained that the NDIS price guide had been updated effective 1 July 2024 which triggered the need for rate changes from Step Up. The email referred Mr Khan to a team member named Khenn if he wished to have a phone call to discuss his concerns. The email explained that Khenn does not have a direct number, but a call can be arranged via email. The email stated a reference letter can be arranged for Muaz, but this would attract a fee of $190.50. The email ended with a request for Mr Khan to engage nicely with Step Up staff members.

• [13] Step Up sent a follow-up email to Mr Khan concerning the signing of the new Services Agreement on 12 August 2024.[12] The email requested that Mr Khan sign the new Services Agreement by 14 August 2024. The email provided notice that Muaz's services would cease if a signed Service Agreement were not provided by 14 August 2024.

• [14] Mr Khan sent an email in response later in the day on 12 August 2024.[13] Mr Khan stated that he had not received the information requested in previous emails and had not received a phone call. Mr Khan stated his concerns needed to be addressed and he was prepared to raise them with the NDIS if required. Mr Khan provided his mobile number and stated a response could alternatively be provided via email.

• [15] Step Up responded later in the day on 12 August 2024 to reforward its email previously sent to Mr Khan on 7 August 2024 which provided information in response to Mr Khan's requests.[14]

• [16] Step Up sent a follow-up email on 16 August 2024.[15] The email referred to not receiving a response to the previous emails sent on 7 and 12 August 2024. The email sought confirmation of what type of reference Mr Khan was seeking for Muaz. The email reiterated that Khenn could be contacted to discuss Muaz's employment and that a phone call could be arranged via email. The email requested that Mr Khan provide a signed copy of the new Services Agreement by 19 August 2024 and stated Muaz's services will need to be discontinued if this is not provided. The email ended by indicating Mr Khan should feel free to raise his concerns with the NDIS.

• [17] Step Up sent a further email to Mr Khan on 23 August 2024.[16] The email contained a last reminder that Step Up needed a signed copy of Muaz's new Services Agreement. The email states Step Up will allow Mr Khan to provide a signed copy by 12pm on 30 August 2024. The email states: "... if we do not receive a response or if Muaz's service agreement is not signed Friday 30th August 2024 12pm, please understand that we will have no choice but to discontinue all services outlined in his Service Agreement starting from 1st September 2024." The email contained an explanation about the legal requirement for Step Up to have a new Service Agreement and follow-up content about the reference for Muaz and the opportunity for a call to be arranged with Khenn.

• [18] Step Up sent a further email to Mr Khan at 11:11am on 30 August 2024.[17] The email states a call and text message from Step Up to Mr Khan had not been answered. The email extended the due time for the signed Service Agreement to 2pm that day and stated: "If we do not receive a response from you by today (30/8) at 2pm, unfortunately Muaz's services will all be stopped by 31/08/24 (Young Adults Sports Program and Employment Support)."

• [19] Step Up sent a further email to Mr Khan at 2:49pm on 30 August 2024.[18] The email referred to Step Up not being able to contact Mr Khan and that a new signed Service Agreement had not been provided. The email states: "This puts us in a difficult position, and we regret to inform you that, as of today (Friday 30/08/24), it will be Muaz's last day with Step Up for the services outlined in his Service Agreement." The email states Muaz was given an update about the situation that afternoon. The email expresses regret about having to end Muaz's services and wishes him all the best for the future.

• [20] Step Up sent a further email to Mr Khan at 4:32pm on 30 August 2024.[19] The email referred to Mr Khan contacting a staff member, Cindy, via text message to indicate he was waiting for paperwork from the NDIS to arrive next week. The email states: "Please understand that Muaz's services with us (Young Adults Program and Employment Support) will still be paused from 01/09/24 until further notice and when we are able to resolve the issue."

• [21] Ms Lee provided uncontested evidence that Muaz attended work on Monday, 2 September 2024, which was not a normal working day, and was sent away on the basis that his employment had ended.

• [22] Mr Khan ultimately provided a signed copy Muaz's new Service Agreement on 9 September 2024.[20] Muaz was able to resume attending Step Up's Young Adults Program as a participant after Mr Khan provided the signed Service Agreement, but his employment remained terminated.

• [23] Mr Khan confirmed during the hearing that he is Muaz's legal guardian and has the legal authority to make decisions about his employment. Mr Khan confirmed he was acting as Muaz's guardian when he refused to sign the new Service Agreement.

• [24] Mr Khan and Ms Lee provided oral submissions during the hearing and answered questions from me. I have considered all the submissions.

• [25] Under s.396 of the Fair Work Act 2009 (FW Act), the Commission is obliged 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 SBFDC;

(d) whether the dismissal was a case of genuine redundancy.

• [26] I have previously found that Muaz's application was filed within 21 days of the dismissal taking effect on 1 September 2024.[21]

• [27] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

• [28] There was no dispute, and I find, that Muaz's employment with Step Up was terminated at the initiative of Step Up effective 1 September 2024. I am therefore satisfied that Muaz has been dismissed within the meaning of s.386 of the FW Act.

• [29] It is not in dispute, and I find, that Muaz was a person protected from unfair dismissal. Muaz had completed the minimum employment period of six months for a non-small business employer.[22] Muaz's employment with Step Up was covered by the Social, Community, Home Care and Disability Services Industry Award 2020[23] and his earnings were below the high-income threshold.

• [30] Step Up is not a small business employer. The Small Business Fair Dismissal Code is not relevant.

• [31] Step Up did not argue Muaz's dismissal was a case of genuine redundancy. I find the dismissal was not a case of genuine redundancy.

• [32] Given my findings above in relation to the initial matters, I am required to consider the merits of Muaz's unfair dismissal application.

• [33] Section 387 of the FW Act provides that, in 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.

• [34] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[24]

Was there a valid reason for dismissal related to Muaz's capacity or conduct?

• [35] In order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded"[25] and should not be "capricious, fanciful, spiteful or prejudiced."[26] However, 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.[27]

• [36] Where a dismissal relates to an employee's conduct, the Commission must be satisfied that the conduct occurred and justified termination.[28] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.[29]

• [37] This case is complicated by Mr Khan's role as guardian for Muaz. There is no suggestion that Muaz did anything wrong during his employment with Step Up, which lasted for around two years.

• [38] I consider Step Up issued a lawful and reasonable direction for the new Service Agreement to be signed by Mr Khan on behalf of Muaz on several occasions in August 2024. I accept Ms Lee's evidence that Muaz's employment requires Step Up to expend significant other resources and that the NDIS funding is necessary to make the arrangements viable. There is nothing to suggest it was unlawful for Step Up to direct Mr Khan to sign the new Service Agreement on behalf of Muaz. I also consider the direction to sign the new Service Agreement was reasonable in the circumstances. Mr Khan could have continued raising his concerns while Muaz remained employed if he had complied with the direction to sign the new Service Agreement.

• [39] Mr Khan declined to comply with the lawful and reasonable direction on several occasions in August 2024. Mr Khan accepts he was acting on Muaz's behalf as an employee when he refused to sign the new Service Agreement. I consider the refusal to comply with a lawful and reasonable direction was a valid reason for Muaz's dismissal.[30]

• [40] This factor weighs against a finding that Muaz was unfairly dismissed.

• [41] Proper consideration of s.387(b) requires a finding to be made as to whether Muaz "was notified of that reason". Contextually, the reference to "that reason" is the valid reason found to exist under s.387(a).[31]

• [42] 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,[32] and in explicit[33] and plain and clear terms.[34]

• [43] I find that Muaz's guardian, Mr Khan, was notified of the reason for dismissal. The documentary evidence establishes Step Up put Mr Khan on notice on several occasions in August 2024 that it intended to end Muaz's employment if the new Service Agreement was not signed by Mr Khan.

• [44] This factor weighs against a finding that Muaz was unfairly dismissed.

Was Muaz given an opportunity to respond to the valid reason?

• [45] 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.[35]

• [46] The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.[36] 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 this concern, this is enough to satisfy the requirements.[37]

• [47] I find that Muaz's guardian Mr Khan was provided with an opportunity to respond to the valid reason for Muaz's dismissal. Step Up put Mr Khan on notice on several occasions during August 2024 that Muaz would be dismissed if the new Service Agreement was not signed. Mr Khan had a number of opportunities to explain why Muaz should not be dismissed if he did not sign the new Service Agreement.

• [48] This factor weighs against a finding that Muaz was unfairly dismissed.

Did Step Up unreasonably refuse to allow Muaz to have a support person present to assist at discussions relating to the dismissal?

• [49] This is a neutral factor. Mr Khan was able to advocate for Muaz during extensive email correspondence with Step Up in the lead up to the dismissal.

Was Muaz warned about unsatisfactory performance before the dismissal?

• [50] This factor is not relevant. No issues have been raised with Muaz's performance.

To what degree would the size of Step Up's enterprise be likely to impact on the procedures followed in effecting the dismissal?

• [51] I do not consider the procedures followed by Step Up were defective. I consider this is a neutral factor.

To what degree would the absence of dedicated human resource management specialists or expertise in Step Up's enterprise be likely to impact on the procedures followed in effecting the dismissal?

• [52] I do not consider the procedures followed by Step Up were defective. I consider this is a neutral factor.

• [53] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

• [54] It has long been established that the effects of dismissal on the personal or economic situation of the dismissed employee may be taken into consideration under s.387(h) of the FW Act.80

• [55] I consider it is relevant that Muaz has been dismissed through no fault of his own. Muaz lost his job because his guardian refused to sign a new Service Agreement on his behalf. Muaz has a disability and from all accounts loved his role with Step Up. It will be difficult for Muaz to find a comparable role. I consider the effects of the dismissal on Muaz's personal situation are a relevant matter that weighs in favour of finding he was unfairly dismissed.

• [56] I have made findings in relation to each matter specified in s.387 of the FW Act. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[38]

• unjust because the employee was not guilty of the alleged misconduct

• unreasonable because the evidence or material before the employer did not support the conclusion

• harsh on the employee due to the economic and personal consequences resulting from being dismissed, or

• • harsh because the outcome is disproportionate to the gravity of the misconduct (the punishment does not fit the crime).[39]

• [58] Having considered each of the matters specified in s.387 of the FW Act, I am not satisfied that the dismissal of Muaz was unjust or unreasonable. I have found there was a valid reason for Muaz's dismissal, and I have found that Step Up provided procedural fairness to Muaz through his guardian Mr Khan.

• [59] Muaz's employment ended due to an unfortunate dispute about the new Service Agreement between Mr Khan and Step Up. The consequence of that regrettable dispute is that Muaz has lost the opportunity to perform a rewarding and relatively niche role with Step Up. I find that Muaz's dismissal was harsh because of his unique personal circumstances and because Muaz did not personally do anything wrong in relation to his dismissal. The dismissal arose due to conduct by Mr Khan as his legal guardian.

• [60] I find Muaz was unfairly dismissed because his dismissal was harsh in all the circumstances.

• [61] The remedies available where an employee has been unfairly dismissed are reinstatement, or compensation in lieu of reinstatement. A compensation order can only be made if the Commission is satisfied that reinstatement is inappropriate.[40]

• [62] In considering an appropriate remedy in a case of unfair dismissal, regard must be had to the legislative object set out in s.381 of the FW Act. This includes an emphasis on the remedy of reinstatement[41] and on ensuring that a "fair go all round" is accorded to both the employer and employee concerned.[42]

• [63] Muaz seeks reinstatement to his previous part-time position as Assistant Mentor where he worked eight hours per week for Step Up. Step Up opposes reinstatement. The basis of the opposition is that Step Up has filled Muaz's Assistant Mentor role and it is not able to accommodate Muaz's return given its current resources.

• [64] I am not satisfied that there are operational reasons which make reinstatement inappropriate. Ms Lee provided oral evidence about the operational issues but did not support this evidence with any financial information or detailed evidence about the operations of Step Up. Muaz only works eight hours per week and is paid at a supported wage rate. Muaz has been assessed to be able to work productively for Step Up at the supported wage rate. Step Up will also presumably be able to access funding from the NDIS to assist in managing Muaz's employment, now that Mr Khan has signed the new Service Agreement. I cannot accept in all these circumstances that the negative operational or financial impact for Step Up will be to an extent that justifies a conclusion that reinstatement is inappropriate.

• [65] I am confident that Muaz can recommence performing his productive duties for Step Up without issue given he worked there without issue for around two years prior to being dismissed. I consider this factor weighs against finding that reinstatement is inappropriate.

• [66] The conflict between Mr Khan and Step Up is relevant to the assessment of whether reinstatement is inappropriate. I consider the potential for further conflict weighs marginally in favour of finding that reinstatement is inappropriate. I consider the conflict only marginally weighs against reinstatement being appropriate because I am confident Mr Khan will approach how he raises any concerns about the employment differently in the future, having seen that his previous actions led to Muaz losing a very rewarding job.

• [67] I consider the potential for negative operational impacts for Step Up arising from Muaz's reinstatement can also be reduced by providing Step Up with a lengthy period of notice before Muaz recommences work. I consider a reinstatement date of 1 July 2025 will provide Step Up with a considerable amount of time to implement arrangements to minimise any negative consequences of Muaz being reinstated. I appreciate Mr Khan and Muaz would prefer not to have to wait that long for Muaz to return to work. However, I consider the priority is Muaz being reinstated and for Step Up to have enough time to ensure the employment can be viable for the future.

• [68] I find that reinstating Muaz to the part-time position of Assistant Mentor with Step Up is not inappropriate.

• [69] I am satisfied it is appropriate to make an order requiring Step Up to reinstate Muaz to the part-time Assistant Mentor role effective 1 July 2025.

• [70] I will also make an order to maintain the continuity of Muaz's employment and the period of his continuous service with Step Up pursuant to s.391(2) of the FW Act. I consider the order is appropriate to ensure Muaz is not further disadvantaged by what I have found was an unfair dismissal.

• [71] Muaz has lost income since being dismissed by Step Up, which may justify the making of a compensation order. The Commission may only make a compensation order if it considers it appropriate to do so and can only make an order that the Commission considers appropriate.[43] Mr Khan confirmed during the hearing that Muaz does not seek compensation for income lost between his dismissal and his reinstatement. I am satisfied that a compensation order is not appropriate in the unique circumstances of this case.

• [72] Orders reflecting my decision will issue separately.[44]

[1] Exhibit R1, Digital Hearing Book page 257, this refers to Muaz receiving salary since 30 August 2022.

[2] Muaz Khan v Step Up Disability Services Pty Ltd [2024] FWC 3335.

[5] Exhibit R1, DHB page 257, this refers to Muaz receiving salary since 30 August 2022.

[21] Muaz Khan v Step Up Disability Services Pty Ltd [2024] FWC 3335.

[22] Step Up's Form F3 states it had 40 employees when Muaz was dismissed.

[24] Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

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

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

[28] Edwards v Justice Giudice [1999] FCA 1836, [7].

[29] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].

[30] Lambeth v University of Western Sydney [2009] AIRC 47, [70] (Hamberger SDP). See also Grant v BHP Coal Pty Ltd [2014] FWCFB 3027 (Richards SDP, Asbury DP, Booth C).

[31] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].

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

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

[35] 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].

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

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

[38] 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].

[39] Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 465; [1995] HCA 24, [128] (McHugh and Gummow JJ).

[40] Fair Work Act 2009 s 390.

[41] Ibid s 381(1)(c).

[42] BlueScope Steel Limited v Sirijovski [2014] FWCFB 2593, [73].

[43] Aurora Energy Pty Ltd v Davison PR902108 (AIRCFB, Watson SDP, Williams SDP, Holmes C, 8 March 2001), [25].

[44] PR785752.

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