Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2025] FWC 872 of Commissioner Redford at Melbourne on 2 April 2025 in matter number U2025/159- Application under s 394 of the Fair Work Act 2009 (Cth) for an unfair dismissal remedy - Small business fair dismissal code - Commissioner found employer's belief that employee was conducting business in competition was not reasonably held and that employee had not engaged in serious misconduct - Whether breach of obligations of employee to take preparatory steps to establish a rival business during employment - Whether arguable grounds for appealable error - Whether in the public interest to grant permission to appeal - Permission to appeal refused.

[1] Gabriel Walker is a plumber. He commenced employment with Plumbtrax Pty Ltd on 7 September 2021. On 17 December 2024, Mr Walker was summarily dismissed by Plumbtrax's Managing Director, Jeff Laurie. Mr Laurie alleged that Mr Walker had created and registered his own business which was similar to the business of Plumbtrax and had begun to promote the business using Plumbtrax's resources and during his work time. At a meeting on 17 December 2024, Mr Laurie gave Mr Walker a letter of termination informing him of the immediate termination of his employment.

[2] On 5 January 2025, Mr Walker applied for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Cth) (the Act). The application was dealt with by Commissioner Redford. On 2 April 2025, the Commissioner handed down his decision.[1] The Commissioner found Mr Walker's dismissal was not consistent with the Small Business Fair Dismissal Code and was otherwise harsh, unjust and unreasonable. Plumbtrax was ordered to pay Mr Walker compensation of $11,726.14 plus a superannuation contribution of $1,348.51.

[3] Plumbtrax now seeks permission to appeal, and to appeal, from that decision. In relation to the appeal, Mr Walker provided a document which was in the nature of a written submission the day before the hearing together with a number of other documents which he sought to rely upon in the appeal. The additional documents were a witness statement of Troy Fairbairn, a letter dated 19 February 2025 addressed to Melbourne Construction Lawyers and photographs of some plumbing equipment. Although it was filed outside of the directions issued in relation to the hearing of the appeal, the Full Bench accepted the written submission provided by Mr Walker. Plumbtrax was provided with the opportunity to file a written note in reply following the hearing. The Full Bench did not receive the additional documents sought to be relied upon by Mr Walker as further evidence on appeal for the purposes of s 607(2) of the Act.

[4] For the reasons that follow, we do not believe that Plumbtrax has raised any arguable grounds of appealable error that would warrant permission to appeal being granted. In any event, we do not consider it is in the public interest to grant permission to appeal and, as such, s 400(1) of the Act requires that permission to appeal be refused.

[5] In his decision, the Commissioner first considered the evidence advanced by the parties. In relation to the meeting held on 17 December 2024, the Commissioner found that Mr Walker was given the letter of termination by Mr Laurie early in the meeting. The Commissioner concluded the decision to terminate Mr Walker's employment had been made prior to the meeting. The Commissioner observed that the meeting was heated and "was not one in which the allegations made against Mr Walker were put to him in a manner inviting his response, nor was he able to provide a proper response to them, nor was any response given properly considered".[2]

[6] The Commissioner observed that the rationale for Mr Laurie's decision to dismiss Mr Walker was that he had created and registered his own business and had begun taking steps to promote that business using Plumbtrax resources without authorisation and during time when he was supposed to be working for Plumbtrax.[3] The Commissioner noted that Mr Walker accepted that he had registered a new business known as Walker Environmental Services Pty Ltd and concluded that Mr Walker's new business was to provide services of a similar kind to those offered by Plumbtrax.[4] The Commissioner observed that there was a dispute as to whether Mr Walker had told Mr Laurie in October 2024 that he planned to resign and set up his own business. Although the Commissioner regarded it as unlikely that Mr Walker told Mr Laurie he was setting up a business, he did not regard it as necessary to resolve that difference in the evidence.[5]

[7] The allegation that Mr Walker had promoted the new business was based on two propositions, namely, that Mr Walker had set up an Instagram account and a website for the business. The Commissioner accepted Mr Walker's evidence that he had established the Instagram account only as a trial, in part because he did not think it would have been practical for him to work in the business at the same time as working full-time for Plumbtrax.[6] The Commissioner did not accept the evidence of Mr Laurie that he had discovered Mr Walker's website prior to the dismissal and found that only Mr Walker's business Instagram account was seen by Mr Laurie prior to the dismissal.[7] The Commissioner did not believe it was necessary to resolve the dispute as to whether Mr Walker had used Plumbtrax equipment in his new business Instagram posts and concluded that there was no evidence that Mr Walker had attempted to solicit clients or suppliers of Plumbtrax during his employment.[8]

[8] Plumbtrax submitted at first instance that Mr Walker's conduct breached a number of clauses of his contract of employment ranging from confidentiality, non-solicitation, post-termination restraints, intellectual property and non-disparagement among other things. The Commissioner observed that it was not explained how Mr Walker had contravened these clauses. In particular, the Commissioner did not accept that the use of the picture of chain cutters and the CCTV photograph posted by Mr Walker, if it occurred, constituted use of "intellectual property" of Plumbtrax, that the non-solicitation clause was not breached and had no post-employment restraint and the property submitted to be "intellectual property" was not "Confidential material" as defined in the contract.[9]

[9] The Commissioner accepted that Plumbtrax was a small business and turned to consider whether the dismissal was not consistent with the Small Business Fair Dismissal Code. The Commissioner set out that, for a summary dismissal to be consistent with the Code, "it is necessary to determine first whether the employer genuinely held a belief that the employee's conduct was sufficiently serious to justify immediate dismissal, and second, whether the employer's belief was, objectively speaking, based on reasonable grounds".[10] The Commissioner accepted that Mr Laurie believed that Mr Walker had engaged in conduct justifying immediate dismissal. However, the Commissioner found that Mr Laurie's belief was not based on reasonable grounds because a proper investigation involving a sensible conversation with Mr Walker would have revealed that he had not commenced conducting the proposed new business. In those circumstances, the Commissioner held that the dismissal was not consistent with the Small Business Unfair Dismissal Code.

[10] In assessing whether Mr Walker's dismissal was harsh, unjust or unreasonable, the Commissioner had regard to the considerations to be taken into account in s 387 of the Act. In particular, the Commission found that there was not a valid reason for dismissal, Mr Walker was summarily dismissed without notice and did not have an opportunity to respond and that "neither its size nor the absence of dedicated human resources management specialisation justify the confrontational approach" to the dismissal.[11] In those circumstances, the Commissioner found that the dismissal was harsh, unjust and unreasonable. The Commissioner found that reinstatement was not appropriate and ordered the payment of compensation to Mr Walker of $11,726.14 plus a superannuation contribution of $1,348.51.

[11] Plumbtrax seeks to appeal the decision of the Commissioner on two grounds. First, Plumbtrax contends that the Commissioner erred in finding that the belief of Mr Laurie that Mr Walker was "conducting a business" was not reasonably held. Second, Plumbtrax contends that the Commissioner erred by finding, contrary to the weight of the evidence, that Mr Walker did not engage in serious misconduct by conducting a business competing with Plumbtrax.

[12] There is no right to appeal from a decision of the Commission, and an appeal may only be made with permission of the Commission.[12] Generally, permission to appeal must be granted if a Full Bench of the Commission is satisfied that it is in the public interest to do so and the Commission has a residual discretion to grant permission to appeal if it considers it is appropriate to do so. In the case of appeals from decisions in unfair dismissal proceedings under Part 3-2 of the Act, s 400 further confines the discretion to grant permission and the grounds upon which an appeal may be brought. Section 400 provides:

(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.

[13] Section 400(1) makes plain that a higher threshold applies in case of appeals from decisions in unfair dismissal proceedings before permission can be granted. Section 400(1) requires that the Commission must be satisfied that it is in the public interest for permission to appeal to be granted and no residual discretion to grant permission exists. As a Full Bench of the Commission explained in Kennedy v Qantas Ground Services Pty Ltd [2018] FWCFB 4552, "if s.400(1) applies, the public interest is the sole criterion for the grant or refusal of permission to appeal".[13]

[14] Plumbtrax advanced two submissions in support of its application for permission to appeal. First, Plumbtrax submits that the legal principles applied by the Commissioner appear disharmonious with other recent decisions of the Commission. The basis of this submission appears to be that Commissioner Redford's finding that the steps taken by Mr Walker to establish a competing business did not amount to serious misconduct is inconsistent with the outcome in a number of other decisions, particularly the decisions of Sams DP in Gilani v GNZ Enterprises Pty Ltd t/a Right Price Conversions [2018] FWC 1719 and Alverson v Artcraft Pty Ltd [2017] FWC 5501. In Gilani, for example, Sams DP observed that "[t]here could not possibly be any doubt, where an employee is operating a business, or has an interest in a business, in direct competition to the business in which he/she is employed, that such conduct 'causes a serious risk to the viability and profitability of the employer's business' which justifies summary dismissal for serious misconduct".[14] The Commissioner addressed the decision of Gilani at first instance, distinguishing Mr Walker's circumstances on the basis that the applicant in Gilani had gone further than Mr Walker in setting up his business, and unlike Deputy President Sams he had no reason to doubt that Mr Walker was not securing business.[15]

[15] With respect, attempts to draw crude analogies between the facts in one case with the facts in another will rarely be of great assistance either in establishing appealable error or in assessing whether it is in the public interest to grant permission to appeal. There is no real doubt as to the principles to be applied. The fiduciary and contractual obligations of employees do not provide an absolute bar to employees who may wish to make preparations for the establishment of a competitive business whilst remaining in the service of their existing employer.[16] The proper analysis requires close attention to the individual steps taken by the employee, to see whether they demonstrate a breach of the employee's obligations.[17] One activity which will normally be in conflict with an employee's contractual and fiduciary obligations is approaching clients of the employer and attempting to have them become customers of the proposed new business.[18] Actually performing work in another business in a manner that creates a real conflict with an employee's duties to their employer, or would damage the interests of the employer, is also likely to involve a breach of the employee's obligations.[19]

[16] Undertaking practical preparatory steps with a view to establishing another business after the cessation of the employment is less likely to do so. For example, in The Change Group International PLC v City Exchange Mart Pty Ltd [2013] FCA 1048, Edmonds J made the following findings in relation to the employees whose conduct was in issue in that case:[20]

In the present case, the steps taken by Mr Yasin and Mr Shah during the course of their employment by the applicants included incorporating a company that was to carry on the foreign currency exchange business. They opened a bank account. There was a suggestion that they took some steps in relation to the fit out of the premises, although the evidence about this is weak.

In my view, none of these acts gives rise to a case for a breach of their fiduciary duties to the applicants. This was not a situation where the respondents were taking advantage of and diverting a corporate opportunity that would otherwise have accrued to the benefit of the applicants. In all the circumstances, there is no basis for finding that Mr Yasin and Mr Shah breached any fiduciary obligation owed to the applicants.

[17] The difficulty for Plumbtrax is that the Commissioner, having carefully considered the evidence before him, found that Mr Walker had done no more than take preparatory steps towards establishing his own business and had not commenced conducting a business in competition with his employer prior to his dismissal. The Commissioner did not suggest that, in another case, the conduct of an employee in operating a business in competition with their employer might not constitute misconduct or provide a valid reason for dismissal. Whether that is so will, of course, depend on the facts of the case. No disharmony is created with the authorities to which Plumbtrax refers by reason of the fact that the Commissioner, in this case, found that Mr Walker had not conducted a business in competition with his employer.

[18] Second, Plumbtrax submits that the appeal raises matters which affect the public at large particularly in respect of an employee's obligation to act in the best interests of the employer and to act faithfully, honestly and diligently. Mr Field submitted that "there really is no better example of public interest than if you were to engage with small business owners up and down the main street of Sydney or country towns, the top of Queensland, WA, SA, Tasmania, they would be in disbelief and most certainly raise issues of major importance and general application that an employee can start their own business in direct opposition and be found to have not engaged in serious misconduct". Whilst Plumbtrax may believe that the conduct of Mr Walker in setting up an Instagram account was a betrayal, we do not believe the decision of the Commissioner undermines existing principles in relation to an employee conducting a business in competition with their employer. The Commissioner simply found that Mr Walker was not conducting a competing business.

[19] For these reasons, we are not satisfied that the appeal raises issues that warrant permission to appeal being granted in the public interest. In any event, we do not consider that Plumbtrax has raised arguable grounds of appealable error. Plumbtrax's grounds of appeal, in substance, seek to challenge the factual findings of the Commissioner that Mr Walker was not carrying out a competing business and that Mr Laurie's belief that Mr Walker was conducting a business in competition with Plumbtrax was not reasonably held. The submission advanced by Plumbtrax is that the Commissioner's finding is inconsistent with the evidence, particularly that Mr Walker had registered a company with ASIC, registered for Goods and Services Tax with Australian Taxation Office, created an Instagram account to advertise its services, created a logo and had advertised a logo on his display picture of the Instagram account and on the Instagram account biography.

[20] None of these actions establish that Mr Walker had done more than take preparatory steps to establishing a separate business as the Commissioner found, perhaps with the exception of creating the Instagram account. In that regard, the Commissioner accepted Mr Walker's direct evidence that the Instagram account was set up as a trial for when he did eventually start up his own business.[21] The findings of the Commissioner were plainly influenced by having seen and heard Mr Walker and Mr Laurie give evidence. In relation to Mr Walker, the Commissioner observed:[22]

I was invited by Plumbtrax to find issue with Mr Walker's credibility in the evidence he gave in this proceeding. The particular basis of this submission was that it was said Mr Walker gave inconsistent evidence about the termination meeting, stating in his evidence at one point that Mr Laurie had taken him through the allegations and he had responded to them, and then later in his evidence, that he had not been able to respond to the allegations. I do not agree with this submission. The evidence given by both parties as to what was said in the termination meeting was less than precise. Mr Walker, a relatively young self-represented litigant, acquitted himself adequately during the hearing. I had no reason to doubt the veracity of his evidence. If there were minor inconsistencies or uncertainties in his evidence, I consider them a natural result of his obvious nervousness under cross examination by a competent lawyer. He was largely forthright, not falling into the common error of attempting to avoid giving answers he may have not thought in his interest or giving self-serving answers.

[21] Findings which are likely to have been influenced by the Commissioner's assessment of the credibility of each of the witnesses who gave evidence before him should not be overturned on appeal unless they are demonstrated to be wrong by "incontrovertible facts or uncontested testimony", or because they are "glaringly improbable" or "contrary to compelling inferences".[23] A finding of this nature would generally only be overturned on appeal if the Full Bench was "satisfied that any advantage enjoyed by the member below as a result of hearing the relevant evidence was not sufficient to justify the findings made".[24] That is not the case here. Accordingly, we do not consider there is any sufficiently arguable basis upon which the Full Bench could overturn the factual findings made by the Commissioner.

[22] The only clearly articulated basis upon which Plumbtrax submitted that the Commissioner's findings were not open was that, in accepting Mr Walker's evidence that the Instagram site was only a trial, the Commissioner took into account that it is unlikely Mr Walker would have been able to conduct a separate business at the same time as working full-time for Plumbtrax.[25] This finding was said to be inconsistent with Mr Walker's evidence that he intended to utilise contractors to provide some services and that he could have carried out work after hours or on the weekend. We do not consider that these matters are inconsistent with the findings of the Commissioner. Fundamentally, as the Commissioner concluded, there was simply no evidence before the Commission that Mr Walker had actually begun operating his business, had taken on or solicited any customers or advertised the business prior to the termination of his employment other than the trial of an Instagram account.[26] It does not assist Plumbtrax to point to some theoretical possibility Mr Walker could have done so.

[23] For these reasons, we are not satisfied it is in the public interest to grant permission to appeal. The consequence is that permission to appeal must be refused.

[24] The Full Bench orders that permission to appeal is refused.

B Field, solicitor, of Irwell Law appeared for the appellant.

[1] Walker v Plumbtrax Pty Ltd [2025] FWC 872.

[2] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [18]- [19].

[3] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [20].

[4] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [29].

[5] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [26].

[6] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [38].

[7] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [47].

[8] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [56].

[9] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [61]- [67].

[10] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [73] citing Ryman v Thrash Pty Ltd [2015] FWCFB 5264 at [41].

[11] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [105].

[12] Fair Work Act 2009 (Cth), s 604(1).

[13] Kennedy v Qantas Ground Services Pty Ltd [2018] FWCFB 4552 at [9].

[14] Gilani v GNZ Enterprises Pty Ltd t/a Right Price Conversions [2018] FWC 1719 at [48]. See also Alverson v Artcraft Pty Ltd [2017] FWC 5501 at [204]- [209].

[15] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [85].

[16] Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 at [77]- [78]; Blackmagic Design Pty Ltd v Overliese [2011] FACFC 24; [2011] FCAFC 24; (2011) 191 FCR 1 at [102]; Spotless Group Limited v Blanco Catering Pty Ltd [2011] FCA 979; (2011) 212 IR 396 at [26]; Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 at [111]; The Change Group International PLC v City Exchange Mart Pty Ltd [2013] FCA 1048 at [235](1).

[17] Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 at [81].

[18] Hivac Limited v Park Royal Scientific Instruments Limited [1946] Ch 169 at 177; Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 at [113].

[19] Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66 at 74 and 81-82; Hivac Limited v Park Royal Scientific Instruments Limited [1946] Ch 169 at 177.

[20] The Change Group International PLC v City Exchange Mart Pty Ltd [2013] FCA 1048 at [237]- [238].

[21] Transcript, 20 March 2025, PN216 and PN235.

[22] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [44].

[23] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [20]- [31]; Robinson Helicopter v McDermott [2016] HCA 22; (2016) 90 ALJR 679 at [43]; Lee v Lee [2019] HCA 28; (2019) 266 CLR 129 at [55]; AEU v Bendigo Kangan Institute of TAFE [2021] FWCFB 3649 at [36]- [39].

[24] Curtis v Darwin City Council [2012] FWAFB 8021; (2012) 224 IR 174 at [83].

[25] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [38].

[26] Walker v Plumbtrax Pty Ltd [2025] FWC 872 at [83].

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