Fair Work Commission|2025-10-30

Nicholas Diaz v Precise Plumbing And Gas Pty. Ltd. [2025] FWC 3259 (30 October 2025)

s.394 - Unfair dismissal

Unfairly dismissed; small business employer, small business fair dismissal code, compensation ordered

[1] Mr Nicholas Diaz (the Applicant) made an unfair dismissal application under s 394 of the Fair Work Act 2009 (Cth) (the Act) having been dismissed by Precise Plumbing and Gas Pty Ltd (the Respondent). It is uncontentious that the Respondent raised a jurisdictional objection to the application on the basis that the Respondent was a small business employer within the meaning of s 23 of the Act. Neither party took issue with the Respondent having fewer than 15 employees at the relevant time.

[2] Several issues arose for consideration, namely:

a) was there compliance with the Small Business Fair Dismissal Code (the Code) on the basis the Respondent had reasonable grounds for forming the belief that the Applicant had engaged in misconduct of a serious nature which justified immediate dismissal;

b) if the Applicant was not dismissed for serious misconduct, was there otherwise compliance with the Code;

c) if found that there was non-compliance with the Code, was the Applicant's dismissal harsh, unjust or unreasonable; and

d) if the Applicant was unfairly dismissed, what remedy should follow?

[3] Briefly stated, I have concluded that the Respondent dismissed the Applicant on 21 May 2025 and when it did, it did not comply with the Code. Having considered the factors in s 387 of the Act, I am of the view that the Respondent unfairly dismissed the Applicant. I do not consider that reinstatement is appropriate, and it therefore follows that the Respondent is ordered[1] to pay to the Applicant the amount of $20,290.00 (gross), which will be paid in the form of two instalments as follows:

a) Instalment One in the amount of $10,145.00 (gross) is to be paid by the Respondent to the Applicant by no later than 20 November 2025; and

b) Instalment Two in the amount of $10,145.00 (gross) is to be paid by the Respondent to the Applicant by no later than 18 December 2025.

[4] There were two witnesses called to give evidence. The Applicant gave evidence on his behalf. Mark Savage (Savage), the director and owner of the Respondent, gave evidence on behalf of the Respondent.

[5] Neither party was represented by a paid agent or legal representative, and whilst there was a dispute between the parties in respect of the facts, Savage elected not to cross examine the Applicant and the Applicant's cross examination of Savage was limited. This is the case notwithstanding that guidance had been provided to both concerning the purpose of cross examination. As to closing submissions, they took the form of an amalgam of evidence and submission from the bar table. Whilst a determinative conference had been broached with the parties, the Applicant pressed for a hearing, and in light of that request and the factual dispute, I considered that the appropriate course. In retrospect, that decision was likely foolhardy.

[6] The broader context concerning the application has been extracted from the written witness statements of the Applicant and Savage and their limited evidence provided at hearing. I note that reliance has been placed upon the closing submissions of both parties. Whilst an opportunity to provide evidence was given, it was not until the parties provided their closing submissions that evidence was elucidated. An abridged version of their evidence follows.

[7] The Applicant commenced employment with the Respondent in 2022 as an apprentice plumber.

[8] The Respondent gave unchallenged evidence that at the time of the Applicant's dismissal it had five full-time employees.

[9] It is apparent that during the Applicant's apprenticeship with the Respondent, provision was made by the Respondent for the Applicant to receive a progress incentive payment (PIP). If the Applicant's account is to be believed, it is that PIP that forms part of the controversy between the parties. It was by letter dated 28 July 2023 that the Respondent outlined the provision of the 'Apprenticeship PIP'. The letter stated:

As part of Precise PG commitment to providing the highest level of training and to incentivise apprentices to honor [sic] their commitment to the apprenticeship offered to buy [sic] Precise PG. We are implementing a Progress Incentive Payment of $2 per hour on a standard 38- hour week.

This PIP will accrue over the course of your apprenticeship and be paid out on the successful full completion of the training contract.

To be eligible for our payment you will need to be employed by Precise PG at the time of receiving your Plumbing and Gas Fitting license.

You will not be eligible for any reason to receive this PIP if the above terms are not met under any circumstances.

As a recognition of your commitment to the company PIP payments will be back dated to 2 April 2022, your date of commencement with the Company.

By signing this form you understand that if for any reason you employment at Precise PG as an apprentice finishes you will not receive this payment.

Precise PG does not require you to accept this offer and you may choose to continue on under the normal pay rate with no PIP incentive.

All other conditions of your employment contract remain unchanged.

[10] The Applicant finished his apprenticeship in 2025. The Applicant reports that he completed the apprenticeship in March 2025, and Savage contends it was mid-2025, noting that at no time had the Applicant provided his trade licence to demonstrate he was a licensed plumber.

[11] Included in the Applicant's documents was a document with the subject line 'Private and Confidential - Change to Employment Conditions.' That letter, of 20 March 2025, set out the following:

We take this opportunity to formally congratulate you for completing your apprenticeship.

Your current employment with Precise Plumbing & Gas is Apprentice Plumber and will cease 23/03/2025. Your new employment with Precise plumbing and Gas will be Qualified Plumber and will commence 24/03/2025. Your new wage will be $55/hr.

You will be paid out all monies owed in accordance with your PIP dated 28/07/2023, acknowledging back payment is to your commencement date of 02/04/2022.

You will be paid out all monies owed in leave, RDO's and other accrued expenses.

We thank you for your ongoing efforts and support to date.

If you have any questions about the terms an conditions of employment, please don't hesitate to contact Mark Savage.

[12] Included in the Respondent's documents was a purported employment contract of the Applicant. That employment contract provided that the Applicant commenced with the Respondent in a full-time capacity as a qualified plumber on 24 March 2025 (having transitioned as an apprentice). The Applicant said that he worked 40 hours a week and earnt $55.00 an hour.

[13] The Applicant gave evidence that on the morning of 21 May 2025 he had a meeting with Savage. The Applicant notes that Savage had arranged the meeting to address how 'unorganised' Savage's jobs had been whilst away on a holiday in Vietnam. The Applicant explained that the jobs had been 'wrongly quoted, wrong or no parts were being delivered, and clients were getting upset'. In support of his evidence, the Applicant referred to a text message that appears to have been sent on Friday, 16 May, from 'Mark Precise'. The text message stated as follows:

Apologies for all the fuck around on Mirrabooka job i was very under prepared and didn't think we would win that job. I should of left you at the Temple all week and started mirrabrooka next week

I know your very pissed off. That job came through last week. Let's sit down nexts week and have a chat about it you and me.

[14] There was no one else in attendance at the meeting according to the Applicant. The Applicant reports that Savage became angry during the meeting because the Applicant advised him that he would be seeking legal advice regarding unpaid work entitlements. The Applicant stated that he raised with Savage how Savage had not paid out any of his leave entitlements, his rostered days off (RDOs) and the PIP, all of which were due to him a few months prior and had accrued during his apprenticeship.

[15] The Applicant stated that it was not the first time he had spoken about the issue of the payments with Savage. The Applicant said that Savage advised him that morning that he did not have any money to pay him. The Applicant says that he pointed out to Savage that Savage had 'money for holidays, hiring staff and other bits', and that the Applicant would need to get legal advice. It was at that point, stated the Applicant, that Savage became aggressive and told the Applicant to take his tools out of Savage's car and leave the vehicle at the premises (it appears that the premises were at Osborne Park, a suburb in Perth, Western Australia).

[16] The Applicant stated that he rang his dad who told him not to leave his tools on the road as they were worth thousands of dollars, and to drive the car home and take his tools out there, which the Applicant did.

[17] In his witness statement Savage gave evidence that:

On 21 May 2025, I met with Mr Diaz at our head office in Osborne Park for a performance discussion. During this meeting I raised concerns including his treatment of employees, the standard of his work, failure to wear his uniform, and his overall attitude.

During the discussion, Mr Diaz expressed frustration, stated that he lacked motivation, and indicated he did not wish to work until he received a PIP payment. I advised him that if he was unwilling to perform his duties, he was to return the company vehicle and tools so they could be used by other employees. Mr Diaz stated he was seeking legal advice and left with the company vehicle and tools.

[18] At hearing, Savage gave evidence that he told the Applicant to take his tools out of the car and leave the vehicle at the premises

[19] The Applicant said that he then received a letter saying that he would be paid out his entitlements in June. By letter dated 21 May 2025, Savage wrote to the Applicant confirming a final payout (in respect of the PIP payment). The letter set out the following:

We would like to extend our sincere apologies for the delay in processing your final payout. We understand the importance of timely and accurate payments and regret any inconvenience this may have caused.

It is our understanding that a verbal agreement was made between you and Mark regarding the payout to be made in instalments. We acknowledge this arrangement has been unsuccessful.

We would like to confirm that the total outstanding amount of $14,566.96 will be paid in full on the final pay date this month, which is scheduled for 02 June 2025.

Should you have any questions or require further clarification, please do not hesitate to reach out...

[20] The Applicant gave evidence that the next day he was told on the work 'chat' that Savage wanted him back, to which the Applicant responded on the chat that Savage had told him to get his tools out of the car and leave. According to the Applicant, Savage promptly deleted him from the 'chat' and thereafter shut him out of the 'work chat'.

[21] It was Savage's evidence that the Applicant failed to attend scheduled work shifts despite being contacted directly by the Respondent's scheduler, and that following the Applicant's conduct in respect to his response in the 'group chat', the Applicant was removed from the 'group chat' and received his first written warning.

[22] The Applicant further noted that he received an email with a verbal warning letter attached. Included in the Respondent's documents was a letter of 22 May 2025 with the subject line, ' Re: Confirmation of Verbal Warning', it stated as follows:

This letter serves as [sic] summary of our meeting held at Precise Plumbing and Gas head office on 21/05/2025 at 6:45AM regarding your recent conduct.

The treatment of other employees
The standards of work to AS/NZS 3500
Uniform
Overall attitude

As discussed, it has been recommended that you being seeking alternative employment while you continue in your current role at Precise Plumbing and Gas. Please be advised that any further recurrence of this behaviour may lead to additional disciplinary action, in accordance with the procedures outlined in Section 10.5 of the Employee Handbook.

The team here at Precise Plumbing and Gas rely on you to be a contributing staff member. As always, I hope you will feel free to discuss with me any problems or concerns that may arise.

[23] The Respondent, in addition, tendered into evidence a letter of 23 May 2025, with the subject line 'First Written Warning'. That letter set out the following:

On 20/05/2025 you met with Mark Savage at Precise Plumbing & Gas head office. At this

meeting you were advised that your conduct has been unsatisfactory, and it was recommended you seek future employment elsewhere whilst continuing in your current role at Precise Plumbing and Gas. We acknowledge no formal conclusion was reached during this meeting due to your decision to leave the premises abruptly.

On 22/05/2025 you engaged in behaviour that was undermining management and threatening

work rapport. This behaviour will not be tolerated here at Precise Plumbing and Gas and an

improvement of this is required effective immediately.

Future reoccurrences of this behaviour may result in further disciplinary action as per our

disciplinary procedure set out in section 10.5 of the Employee Handbook.

If you wish to respond to this formal warning letter, please do so by replying in writing.

[24] As the Applicant failed to attend work (presumedly on 22 May 2025), Savage explained that he gave the Applicant a final written warning for abandonment of employment. That Final Written Warning of 23 May 2025, set out the following:

On 20/05/2025 you met with Mark Savage at Precise Plumbing & Gas head office. At this meeting you were advised that your conduct has been unsatisfactory, and it was recommended that you seek future employment elsewhere whilst continuing in your current role at Precise Plumbing and Gas. We acknowledge no formal conclusion was reached during this meeting due to your decision to leave the premises abruptly.

As per your schedule you were due to work at COJC Temple 7:00am - 3:30pm, 21/05/2025, 22/05/2025 & 23/05/2025. Since this meeting you have failed to show up to your work as scheduled with no communication to management, this has now given us a significant delay on major projects.

Future reoccurences [sic] of this behaviour may result in further disciplinary action as per our disciplinary procedure set out in section 10.5 of the Employee Handbook.

If you wish to respond to this formal warning letter, please do so by replying in writing.

[25] Whilst the Respondent had issued to the Applicant a Final Written Warning on 23 May 2025, included in the Respondent's evidence was a letter of termination of that same date. That letter of termination stated:

Following our previous communications regarding your conduct and attendance, I regret to inform you that I have decided to terminate your employment. Based on your length of service, your notice period is 3 weeks. Your last day working with Precise Plumbing and Gas will be Friday 13/6/2025.

On Friday 13/06/2025, You [sic] will also be paid your accrued entitlements and any outstanding pay, up to and including your last day of employment.

If you have been paid annual leave in advance, any amount of annual leave still owing will be deducted from your final pay.

Kindly arrange to return any company property in your possession, including vehicle, uniform, tools or documents, by your last working day 13/06/2025...

[26] In its written materials the Respondent submitted that the Applicant's dismissal took effect on 13 June 2025, and that the Applicant was dismissed for misconduct and poor work performance. According to the Respondent, having provided the Applicant with two written warnings and having required the Applicant to work an additional two weeks (after having notified him of his dismissal), constituted an opportunity to respond to the reasons for the Applicant's dismissal.

[27] In respect of the allegations of misconduct, the Respondent clarified in its written materials that the Applicant had posted in a 'group chat' in a manner that undermined management, and that the 'group chat' in question, included all internal employees in addition to the Respondent's external accountant. The Respondent explained that the Applicant had been given a verbal warning on the morning of 21 May 2025, and the Applicant continued to be scheduled to work as normal. The Respondent observed that when the Applicant's attendance at work was requested, the Applicant posted in a 'group chat' spreading false information about Savage. The Respondent noted that as a consequence, the Applicant was removed from the 'group chat'.

[28] In respect of the purported poor performance of the Applicant, the Respondent explained that it had received multiple call backs from the Applicant's work not being up to standard. It considered that the Applicant had a poor attitude to others - especially 'the girls in the Admin team' and had a poor attitude regarding work.

[29] I am satisfied that the Applicant was protected from unfair dismissal,[2] such that his application was made within the required period as prescribed in s 394(2) of the Act and he earned less than the high income threshold. No party made mention of the dismissal being by way of genuine redundancy.

[30] I note that no jurisdictional objection was raised that the minimum employment period had not been met. From the evidence provided it appeared that on the conclusion of Applicant's apprenticeship he continued to work for the Respondent pursuant to a new employment contract. It is not apparent from the evidence that the employment relationship came to an end at that time (around March 2025) or that the Respondent gave notice that it would not recognise the Applicant's service when an apprentice. I am therefore satisfied that the minimum employment period was met.

[31] Having considered the evidence, I am also satisfied that the Respondent is a small business employer as defined in s 23 of the Act, and that the Code applied to the dismissal. As noted, neither party advanced an argument to the contrary.

[32] The making of factual findings can prove difficult when parties are self-represented. This is because there is a lack of appreciation of the role and relevance of cross-examination. Where one might ordinarily rely upon the adages of 'unchallenged evidence' or that a party 'did not contest' the evidence therefore giving rise to a conclusion of acceptance of the evidence, this conclusion proves difficult to draw when parties are none the wiser about evidential rules and have effectively declined to engage in cross examination.

[33] It has previously been said that it is trite that the tribunal of fact having seen and heard the witness, is to decide whether the evidence of the witness is worthy of acceptance and this may involve accepting or rejecting the whole of the evidence or accepting some of the evidence and rejecting the rest.[3] As will become apparent shortly, I am of the view that Savage engaged in that not unusual approach of communicating falsehoods about some things whilst telling the truth about others in his witness statement, noting that at hearing, he barely said a thing.

[34] As to what was discussed between the Applicant and Respondent at the meeting on 21 May 2025, I prefer the evidence of the Applicant for the reasons that follow.

[35] First, I find it highly unusual that after a period of three years working for the Respondent, it was not until 21 May 2025 that Savage took issue with the Applicant's conduct in respect to his standard of work, treatment of employees, failure to wear a uniform and overall attitude, and at that particular time saw fit to address it. Only five days earlier Savage had sent a text message to the Applicant apologising for the 'fuck around on the Mirrabooka job' conceding that he had been very under prepared. In that same text message Savage stated, '[l]et's sit down nexts [sic] week and have a chat about it you and me'. In his witness statement Savage makes no reference to the reason why the meeting of 21 May 2025 was called, albeit he makes note that almost immediately after the Applicant was signed off on his apprenticeship, there was a notable change in his behaviour and attitude towards staff, management and his role within the company. Whilst Savage makes this assertion, there is no other evidence to support a finding of the Applicant underperforming in his role or engaging in misconduct prior to 21 May 2025. For his part, the Applicant denies ever having been informed before 21 May 2025 that there were issues with his performance or conduct.

[36] Second, the Applicant gave evidence that the meeting of 21 May 2025 was arranged to 'go over' how 'unorganised' Savage's jobs had been whilst Savage was on holiday in Vietnam. This evidence accords with the content of Savage's text message a week earlier. In light of the Applicant's evidence and that of the text message, I find that the meeting on 21 May 2025 was organised for the purpose of discussing the work that had taken place during Savage's period of leave and the Applicant's dissatisfaction regarding the preparation that had been undertaken for those jobs. In this respect, I do not accept Savage's evidence that he met with the Applicant on 21 May 2025 for the purpose of a performance discussion.

[37] Third, I consider that Savage was candid with his evidence - only in some respects. Savage acknowledged that in the meeting on 21 May 2025 the Applicant said he was going to seek legal advice and that he informed the Applicant '...to return the company vehicle and tools'. However, it is important to recognise that Savage's evidence was couched as follows:

[38] I have recorded that the Applicant gave evidence that when he brought up with Savage that his leave entitlements, RDOs and PIP had not been paid, Savage advised him that he did not have any money to pay the Applicant. The Applicant said he told Savage that if Savage had had 'money for holidays, hiring staff and other bits' then the Applicant would need to get legal advice. The Applicant further stated that it was at this point that Savage became aggressive and 'told the Applicant to take his tools out of his car and leave the vehicle here and premises'. This evidence fundamentally differs to Savage's account of having prefaced the direction with 'if' the Applicant 'was unwilling to perform his duties'.

[39] I find that Savage told the Applicant to get his tools out of the car and leave the vehicle here at the premises in an aggressive manner. I further find that he did so in response to the Applicant having brought up the payment of both the PIP and his accrued entitlements, in addition to having referred to obtaining legal advice in light of the unpaid entitlements.

[40] I do not accept Savage's evidence that he raised performance concerns with the Applicant in that meeting, and in response to those performance concerns the Applicant stated to Savage he was lacking in motivation, or that he was unwilling to perform his duties.

[41] I find that as of 21 May 2025, Savage had, by his communication to the Applicant and by his conduct, dismissed the Applicant. Savage did not use the precise words that the Applicant was dismissed. However, telling the Applicant to get his tools out of the company vehicle and to leave that same vehicle at the premises (the tools and vehicle being essential to the performance of work), in circumstances where the Applicant had questioned Savage about the payment of his contractual entitlements, the same contractual entitlements that had been left unpaid by the Respondent over a not insignificant period, and where the Applicant informed Savage he would seek legal advice, was conduct that evinced the Respondent's intention to no longer be bound by the contractual terms. It was therefore open to the Applicant to accept that repudiation.

[42] Savage's evidence of the events that unfolded after the meeting on 21 May 2025, is a contrived account punctuated by flawed warning letters.

[43] The letter of 22 May 2025 is purported to set out a summary of what Savage discussed with the Applicant on 21 May 2025. That summary includes that it had been recommended (presumedly by Savage) that the Applicant seek future employment elsewhere. Savage's witness statement (with the exception of the annexed letters) and the Applicant's evidence, makes no reference to that statement having been made.

[44] By letter of 23 May 2025, the Applicant was provided with a letter with the subject line of 'First Written Warning'. As detailed, this letter referred to the meeting that took place on 21 May 2025 - notwithstanding it refers to a meeting taking place on 20 May 2025. It outlined that the Applicant had been informed that his conduct had been unsatisfactory, that he should seek employment elsewhere and that no conclusion was reached at the meeting on 21 May 2025 due to the Applicant's decision to leave the premises abruptly. The letter was issued to the Applicant notwithstanding that the Applicant had, on 22 May 2025, informed the Respondent's administrator that Savage had fired him yesterday, and whilst the administrator sent a text back saying that the Applicant had not been fired and considered there was a misunderstanding, the Applicant, when asked if he would be 'working tomorrow' clearly replied, '[n]ah not after how he spoke to me his words were get ur shit out of the ute and leave it here'.

[45] By letter of the same date as the 'First Written Warning', the Applicant received a 'Final Written Warning'. This letter referred to the meeting between Savage and the Applicant on 21 May 2025 (correct this time around) and reiterated much of what was said in the 'First Written Warning' albeit it noted that whilst the Applicant was scheduled to work on 21 May 2025, 22 May 2025, and 23 May 2025, he had failed to show up and work as scheduled, with no communication to management. The 'Final Written Warning' noted that it was a final warning and that if the Applicant wished to reply he could so in writing - no timeframe having been provided. Perhaps unsurprisingly, by a further letter of 23 May 2025 the Applicant was informed that he was dismissed. The Applicant had by this stage, received three letters of the same date progressing from a first written warning to a final written warning to a termination of employment letter.

[46] The 'Final Written Warning' was an opportunistic attempt to create a narrative of Applicant delinquency. That Savage directed the Applicant to leave the vehicle and the tools, was clearly indicative that the Applicant, absent tools of the trade, would be unable to perform work. Further and as noted, Savage's conduct and communication evinced a clear intention not to be bound by the terms of the employment contract, and the Applicant had, as of 22 May 2025, informed the administrator of the Respondent that he would not be working given that which Savage had said.

[47] I accept the Applicant's evidence that on being directed by Savage to take his tools out of the car and leave the vehicle here at the premises, he called his father, and did what his father said, which was to drive the vehicle back to his house and unload his tools there rather than living them behind. At hearing, the Applicant noted that the tools were very expensive, and it had taken a long time to purchase and collect them.

5 When was the Applicant dismissed and was there compliance with the Code?

[48] Based on my findings as set out above, I am satisfied that the Applicant was dismissed on 21 May 2025.

[49] It is relevant at this juncture to note that the test for repudiation is whether the conduct of the employer is such as to convey to a reasonable person, in the position of the employee, renunciation either of the contract as a whole or of a fundamental obligation under it.[4] The issue turns upon the objective acts and omissions and not on uncommunicated intention.[5]

[50] As of 21 May 2025, the Respondent's conduct was such as to convey to a reasonable person, in the situation of the Applicant, renunciation of the contract as a whole. The Applicant's employment contract provided that the Applicant would be performing Plumbing Tradesperson duties, at various sites as directed, and that the Applicant would be provided with a fully serviced company vehicle, which the Applicant could take home overnight. As of 21 May 2025, the Respondent evinced an intention to no longer be bound by that employment contract having effectively withdrawn work, a vehicle and tools. It was open to the Applicant to elect to accept the repudiation at that time - hence giving rise to the Applicant's dismissal. Whilst the Respondent referred to the Applicant having been absent for work after 21 May 2025, as I have detailed, I consider that to have been a manufactured narrative on behalf of the Respondent.

[51] Section 396 of the Act provides that before considering the merits of an unfair dismissal application, the Commission must determine, amongst other matters, whether a dismissal was consistent with the Code. This is perhaps unsurprising given that s 385 of the Act sets out that a person has been unfairly dismissed if, in part, the Commission is satisfied that the dismissal was not consistent with the Code.[6]

[52] A person has not been unfairly dismissed where the dismissal is consistent with the Code. It is useful to set out s 388 of the Act:

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[53] The Code is only relevant if the employer is a small business as defined in s 23 of the Act. That section provides that '[a] national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time'. It is not in dispute that the Respondent was a 'small business employer' at the time of the Applicant's dismissal.

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[55] It is not apparent that the Applicant was paid in lieu of notice when his payslips are analysed. However, if I am wrong on this point, I have, in addition considered whether the Respondent was compliant with the 'Other Dismissal' aspect of the Code.

[56] Starting with the 'Summary Dismissal' section of the Code, it clearly applies to dismissals that have 'immediate effect' as that term is understood by reference to the decision in Chen v Australian Catering Solutions Pty Ltd,[7] and not to dismissals on notice.[8] However, as explained in Ryman v Thrash Pty Ltd ('Ryman'), an immediate dismissal may include a dismissal with a payment in lieu of notice which nevertheless is intended to have immediate effect.[9]

[57] In Ryman, the Full Bench provided a useful synopsis of the proper approach to the construction and application of the Summary Dismissal aspect of the Code and its interaction with reg 1.07 of the Fair Work Regulations 2009 (Cth) (the Regulations).[10] That decision has been subsequently followed in Grandbridge Ltd v Wiburd[11] and TIOBE Pty Ltd v Chen.[12]

[58] In Ryman, the Full Bench considered the meaning of 'summary dismissal' and said that it referred to a dismissal without notice arising from 'a breach of an essential term of the employment contract, a serious breach of a non-essential term of the contract, or conduct manifesting an intention not to be bound by the contract in the future on the part of the employee'.[13]

[59] However, it is not the case that under the Code, the Commission must be satisfied that serious misconduct was the basis for the dismissal.[14] Rather, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee's conduct was sufficiently serious to justify immediate dismissal and one must also consider whether that belief was based on reasonable grounds.[15] This element, which has been described as the second element,[16] incorporates the concept that the employer has carried out a reasonable investigation into the matter.[17] It is not necessary to determine whether the employer was correct in the belief that it held.[18] Whether the employer had 'reasonable grounds' for the relevant belief is, of course, to be determined objectively.[19]

[60] A termination of employment may occur by way of a summary dismissal where there is the exercise of an election by the employee to accept the termination of the employment contract in response to a repudiation of the employment contract by the employer, constituted by a breach of an essential term, a serious breach of a non-essential term, or conduct on the part of the employer manifesting an intention not to be bound by the contract in the future.

[61] In my view, the Respondent breached an essential term of the Applicant's employment contract, placing the Applicant in a position to elect to accept the repudiation effective on 21 May 2025.

[62] As will be evident from the factual findings, I am not persuaded that the Respondent had reasonable grounds for believing that the Applicant had engaged in serious misconduct. It follows that the Respondent has been non-compliant with this aspect of the Code

[63] In respect to the 'Other Dismissal' aspect of the Code, the decision of the then Deputy President Asbury in Kotykhov v Dealer Trade Australia Pty Ltd ('_Kotykho_v')[20] provides a comprehensive synopsis of this part of the Code, which is adopted.

[64] The then Deputy President explained that in the terms of the Code dealing with 'Other Dismissal', the drafters included a reference to 'valid reason'. The first sentence of that part of the Code requires that the employee be '... given a reason why he or she is at risk of dismissal'. The second sentence requires that: 'The reason must be a valid reason based on the employee's conduct or capacity to do the job'. Consideration of whether a reason is valid is a separate consideration to the requirement that the employee be given a reason for dismissal although the reference to valid reason is a reference to the reason given to the employee.

[65] For the purposes of considering whether a dismissal is consistent with the provisions of the Code relating to 'Other Dismissal', the then Deputy President proceeded on the following basis:

Before dismissing an employee for reasons of conduct or capacity (other than those justifying summary dismissal) the employer must give the employee a reason why he or she is at risk of being dismissed.
The reason must be a valid reason (in the sense that it is sound, defensible and well founded and justifies dismissal) based on the employee's conduct or capacity.
Conduct includes an omission and capacity is the employee's ability to do the job as required by the employee and also includes the employee's ability to do the work he or she was employed to do.
The employer must give the employee an opportunity to respond to the reason for dismissal before dismissing the employee.
The requirement that there be a valid reason for dismissal means that some consideration should be given to the response the employee provides. This will generally be required when the Commission is assessing whether the reason for dismissal was valid.
The employee must have been warned that he or she is at risk of being dismissed either for similar conduct or capacity issues or that the issue that is the subject of the warning has generally placed the employee's employment at risk and that any repetition or further conduct or capacity issues will result in dismissal.
If the employee has previously engaged in conduct that has placed his or her employment at risk and has been warned in relation to it there is no requirement that a further warning be given and it will be sufficient if the employee is notified that the employer believes that the same conduct or further conduct that places the employee's employment at risk has occurred and gives the employee an opportunity to respond before dismissing the employee.
The employee must have been given a reasonable opportunity to improve his or her performance prior to the dismissal being effected which may include the employer providing additional training and ensuring that the employee knows the employer's job expectations.

9. An employee may request to have another person present to assist in discussions in circumstances where dismissal is possible provided that person is not a lawyer acting in a professional capacity. The employer is not required to offer a support person.[21] (footnotes omitted)

[66] It is evident that the Respondent's primary argument is that the Applicant abandoned his employment. However, as traversed in the factual findings, the Applicant was dismissed on 21 May 2025, therefore his absence from work on 22 May, 23 May and 24 May 2025, did not indicate that he had abandoned his employment. The evidence showed that the Applicant considered that he had been dismissed on 21 May 2025, a conclusion which I have found was appropriate and correct. It follows that the Respondent did not comply with the 'Other Dismissal' aspect of the Code.

[67] I have found that the Respondent was non-compliant with the Code. For the sake of completeness, I will now consider whether the Applicant was unfairly dismissed when considering those factors in s 387 of the Act.

[68] The statutory requirement imposed by s 385(b) of the Act is that the Commission must reach a state of satisfaction that a dismissal was harsh, unjust, or unreasonable. The conduct which may fall within the phrase 'harsh, unjust or unreasonable' was explained in Byrne v Australian Airlines Ltd by McHugh and Gummow JJ as follows:

.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.[22]

[69] In considering whether a dismissal is unfair, the Commission must consider the matters specified in s 387, including whether there was a valid reason for dismissal and any other matters the Commission considers relevant.

[70] Section 387 of the Act contemplates that the Commission will undertake an overall assessment as to the nature of the dismissal and in so doing, the criteria in s 387 must, where relevant, be weighed in totality.

[71] In respect of whether there was a valid reason for the Applicant's dismissal,[23] by virtue of the findings reached at paragraphs [32] - [47] of this decision, I consider that there was not. 'Valid', in this context, generally refers to whether there was a sound, defensible or well-founded reason for the dismissal.[24] Such a reason is one that is valid in the sense that it was both sound and substantiated.

[72] It follows that the Applicant was not notified of the valid reason for dismissal and given the opportunity to respond.[25] The procedure adopted by the Respondent concerning the Applicant's dismissal was, in my view, introduced after the Applicant had already been dismissed. The warning letters that followed the Applicant's dismissal on 21 May 2025, namely those of 22 May and 23 May 2025, lacked authenticity and were, in my view and as already noted, authored in an opportunistic attempt to create a narrative of Applicant delinquency to support a manufactured dismissal of the Applicant on 23 May 2025.

[73] While the size of the Respondent business and its lack of internal human resources specialists undoubtedly impacted the procedures followed in effecting the Applicant's dismissal[26] (there being no procedure), these factors do not, in my view, weigh in favour of a finding that the dismissal was not unfair. This is because the Respondent not only had a total disregard for any procedure when effecting the dismissal of the Applicant, but then went on to manufacture a disciplinary process post dismissal.

[74] In respect of s 387(h) of the Act, the Respondent dismissed the Applicant without notice and in the circumstances the sanction was unwarranted. It is difficult to conceive how a dismissal in such circumstances could be anything but unfair. The Applicant had served his apprenticeship with the Respondent and had continued to work for the Respondent post-apprenticeship.

[75] The Applicant was protected from unfair dismissal at the time he was dismissed. The Applicant has been unfairly dismissed; his dismissal having been unreasonable, unjust and harsh. It is therefore incumbent upon me to consider an order in respect of remedy.

[76] In his submissions the Applicant stated that he sought an order for compensation rather than reinstatement.

[77] Before dealing with the quantum of compensation, the Commission must be satisfied that reinstatement is inappropriate and that an order for payment of compensation is appropriate in all the circumstances.[27] In relation to reinstatement, I consider that it would be inappropriate given the sentiment expressed by the Applicant that he does not seek reinstatement by way of remedy. I therefore consider that an award of compensation is appropriate in this case.

[78] Compensation is provided to an applicant who has been unfairly dismissed as reparation for losses reasonably attributable to the unfair dismissal; it is not intended to be punitive.[28] The amount of compensation ordered by the Commission must not include a component for shock, distress or humiliation, or other analogous hurt, caused to the person by the dismissal.[29]

[79] In assessing compensation, it is necessary to take into account all the circumstances of the case, including the specific matters identified in s 392(2)(a)-(g), and to consider the other relevant requirements of s 392 of the Act.

[80] The well-established approach to the assessment of compensation under s 392 of the Act is to apply the 'Sprigg Formula', derived from the decision of the Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul's Licensed Festival Supermarket ('Sprigg').[30] This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes - Cobram & District Retirement Villages Inc ('Bowden'),[31] and I have applied this methodology in reaching my decision.

[81] Under that approach, the first step to be taken in assessing compensation is to consider s 392(2)(c), that is, to determine what remuneration the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed (the anticipated period of employment). In Bowden, this was described in the following way:

[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

'... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.'

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the 'anticipated period of employment'...[32]

[82] Once the first step of determining the anticipated period of employment has been undertaken, various adjustments are made in accordance with s 392 of the Act and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee's misconduct, and the application of the cap of six months' pay. This approach is, however, subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case. The approach can be summarised as follows:

Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the Respondent had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
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.
Step 5: Apply the legislative cap on compensation.

7.2.1 Remuneration that the Applicant would have received (s 392(2)(c))

[83] At the time of his dismissal, the Applicant's rate of pay appeared to be $55.00 per hour. On average it appeared that the Applicant had worked 38 hours a week.

[84] When calculating the gross amount earned by the Applicant over a period of 26 weeks, this amounted to $54,340.00, which amounts to gross weekly remuneration of $2,090.00.

[85] The evidence suggests that the Applicant's performance and conduct prior to questioning Savage about the payment of the annual leave, RDOs and PIP appeared, apart from a purported uncleanliness of the work vehicle, unproblematic. Further, given the Applicant's longevity with the Respondent business, one might assume that the Applicant held no imminent intention to resign from his position. However, the evidence shows that there was an appreciable tension between the Applicant and Savage regarding the payment of the PIP and other entitlements that the Applicant considered were due.

[86] In short, but for the Applicant's dismissal, I am satisfied that the Applicant would have proceeded to work for the Respondent for a period that extended to 16 weeks. That is, the anticipated period of employment would have concluded on 10 September 2025.

[87] Therefore, had the Applicant not been dismissed, he would have earned $33,440.00 (gross).

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

[88] The Applicant entered into an employment contract on 1 September 2025, and the contract provided that the commencement of employment was as of 1 September 2025. The employment was as a plumber and the Applicant's hourly rate was $45.00. The hours of work were 40 hours per week. I therefore consider it appropriate to deduct from the $33,440.00 (gross) the amount of $2,700.00 (gross), which equates to approximately one week and a half of pay. This brings the compensatory amount down to $30,740.00

[89] I do not consider that the Applicant's length of service calls for any upward or downward adjustment to the compensation amount that should otherwise be ordered.

[90] As was said in the Full Bench decision in McCulloch v Calvary Health Care Adelaide ('McCulloch'), it is important to appreciate that a deduction for contingencies is applied to prospective losses, that is loss occasioned after the date of the hearing.[33] The Full Bench in McCulloch quoted the Full Bench of the Australian Industrial Relations Commission in Ellawala v Australian Postal Corporation[34] as follows:

... A discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. At the time of hearing, any such impact on an applicant's earning capacity between the date of termination and the hearing will be known. It will not be a matter of assessing prospective probabilities but of making a finding on the basis of whether an applicant's earning capacity has in fact been affected during the relevant period.[35]

[91] This contrasts with the exercise before me now. It is approximately four months since the Applicant's employment was terminated and there is no direct evidence that he was ill during this period. However, the Applicant submitted that in the month of August 2025 he was on a long-planned holiday and was therefore unable to perform work during this period. However, any contingency calculation would only have relevance for the six months (namely, between the date of my decision and the end of the anticipated period of employment). As observed, a contingency discount necessarily only applies to future circumstances and, in the context of the present matter, I am not persuaded to make any discount for contingencies.

[92] In relation to taxation, compensation will be determined as a gross amount, and it will be left to the Respondent to deduct any amount of taxation required by law.

[93] The Respondent was provided the opportunity to address this factor and Savage submitted that any order for compensation would impact the viability of the Respondent business. Regarding its viability, the Respondent relied upon a draft financial statement for the year ended 30 June 2025. The draft statement set out that it had been prepared by Helm Accounting. The net profit after tax for the Respondent business was $177,997.00. There are perhaps some oddities in the statement with '21,863' having been allocated to 'subscriptions and memberships'. Notwithstanding, I am content to take the draft statement on face value, there being no reason to conclude that it does not provide an accurate representation of the financial status of the Respondent business as at that time.

[94] The Applicant submitted that in respect of a compensatory amount, he did not wish to see the Respondent go out of business.

[95] I am therefore content to find that an order for the payment of compensation would affect the viability of the Respondent's business and therefore it is necessary to make an adjustment. It follows that there will a deduction from the compensation amount on this basis of five weeks. This brings the compensatory amount down to $20,290.00 (gross).

[96] Decisions of this Commission and its predecessors concerning the recognition of mitigation efforts do not identify or mandate a single specific approach or formula relative to this discretionary issue.[36] The reasonableness of the efforts taken to mitigate loss depends on the circumstances of the case.[37] As will be evident at this point, the Applicant has furnished evidence of steps taken to mitigate his loss. I have considered that the Applicant has obtained work. In the circumstances, I am able to conclude that the Applicant made reasonable efforts in respect of mitigation and, as a consequence, will not reduce the compensatory amount.

[97] Section 392(3) of the Act requires that if I consider that misconduct on the part of the Applicant contributed to the dismissal, I must reduce the amount of compensation that would otherwise be awarded. I have concluded that the matter of misconduct in these circumstances is irrelevant, the Applicant having not engaged in misconduct.

[98] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap, then the Commission must reduce the amount to the amount of the cap. The Act stipulates that the compensation cap is the lesser of:

a) the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal ($54,340.00); and

b) half the amount of the high income threshold immediately before dismissal ($87,500.00).[38]

[99] For the purpose of s 392(5) of the Act, I am satisfied that the amount is $54,340.00.

[100] Whilst the issue of payment in instalments was not directly addressed by the parties in closing submissions, I consider that there is sufficient evidence before me to suggest that payment by instalment is the appropriate approach to adopt. I note that the Respondent is a small business employer and in part, the dispute between the Applicant and Savage arose from Savage's purported inability to make the payment of the PIP to the Applicant. As a consequence, payment will be made to the Applicant in two parts. The first instalment in the amount of $10,145.00 (gross) will be paid by the Respondent to the Applicant by no later than 20 November 2025. The second instalment in the amount of $10,145.00 (gross) will be paid by the Respondent to the Applicant by no later than 18 December 2025.

[101] The amount of compensation which is derived from the above considerations is $20,290.00 (gross) less deduction of any tax as required by law. I consider that is an appropriate amount of compensation in all the circumstances.

[102] The calculation for compensation is set out in the following table.

Based on the Applicant's rate of pay of $55.00 per hour over 38 hours a week - the gross weekly amount is $2,090.00.

0% as no significant element of future economic loss (no basis for any deduction for contingencies)

[103] In determining the amount for the purpose of the Order,[39] I have taken into account all of the circumstances of the case including the criteria set out in s 392(2) of the Act.

[2] Fair Work Act 2009 (Cth) s 382 (Act).

[3] Cubillo v Commonwealth [2000] FCA 1084; (2000) 103 FCR 1, 45-7 [118]-[123]; Flint v Lowe (1995) 22 MVR 1; S v M (1984) 36 SASR 316, 319-20.

[4] Gelagotis v Esso Australia Pty Ltd [2018] FWCFB 6092, [119].

[5] Ibid, citing Adami v Maison de Luxe Ltd [1924] HCA 45; (1924) 35 CLR 143, 153-4 (Issacs ACJ), and Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, 658 (Deane and Dawson JJ).

[7] [2017] FWC 3930, [62]-[64].

[8] Ryman v Thrash Pty Ltd [2015] FWCFB 5264, [36] ('Ryman').

[11] [2017] FWCFB 6732 ('Grandbridge').

[14] Ibid [39], cited in Grandbridge (n 11) [28].

[15] Pinawin v Domingo [2012] FWAFB 1359, [29] ('Pinawin').

[17] Ibid, cited in Ryman (n 8) [39]; see also Grandbridge (n 11) [28].

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

[28] Kable v Bozelle [2015] FWCFB 3512, [17].

[32] Ibid [24], quoting Ellawala v Australian Postal Corporation (Australian Industrial Relations Commission, Ross VP, Williams SDP, Gay C, 17 April 2000) [33]-[34] ('Ellawala').

[33] [2015] FWCFB 2267, [21] ('McCulloch').

[35] Ibid [43] quoted in McCulloch (n 33) [21].

[36] Veal v Sundance Marine Pty Ltd [2013] FWCFB 5205, [5].

[37] Biviano v Suji Kim Collection (Australian Industrial Relations Commission, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002), [34]; McCulloch (n 33).

Printed by authority of the Commonwealth Government Printer

Work Regulations 2009

Nicholas Diaz v Precise Plumbing And Gas Pty. Ltd. [2025] FWC 3259

At a glance

Court

Decision date

Source

Judgment (201 paragraphs)

Nicholas Diaz v Precise Plumbing And Gas Pty. Ltd. [2025] FWC 3259 (30 October 2025)

Parties

Legislation Cited (2)

Cases Cited (9)