s.394 - Application for unfair dismissal remedy

Application for relief from unfair dismissal - incorrect recording of working hours - valid reason for dismissal - procedural fairness afforded - factors indicate dismissal was harsh - dismissal not unfair - application dismissed

[1] Rasoul Farddoust was employed by Richemont Australia Pty Limited (Richemont) as Boutique Director of its flagship IWC Schaffhausen store in the Sydney CBD. IWC Schaffhausen is a Swiss luxury watch brand owned by Richemont. Mr Farddoust commenced full-time employment on 31 October 2022. There is no real dispute that Mr Farddoust was a capable and high-performing employee. Richemont started an investigation into Mr Farddoust's working hours and record keeping in July 2025. The investigation ultimately led to Mr Farddoust being summarily dismissed for alleged serious misconduct on 25 August 2025. Richemont alleged an audit revealed that Mr Farddoust had arrived at work late or left early on 13 occasions from 30 June 2025 to 27 July 2025, that Mr Farddoust had manually adjusted its Kronos timekeeping system to inflate his actual hours of work, and that Mr Farddoust repeatedly left before the store closed in breach of store closing procedures. Mr Farddoust filed an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (FW Act) on 26 August 2025. This decision concerns whether Mr Farddoust was unfairly dismissed.

[2] Mr Farddoust provided extensive evidence and submissions in support of his case. That evidence included witness statements and a range of documentary evidence. Richemont relied on evidence from Quentin Chalier (Oceania Brand Director for IWC Schaffhausen), Charles Els (Chief Operating Officer and Company Secretary), and Chelsie Haddo (Human Resources Business Partner).

[3] A hearing was held in Sydney on 8 December 2025 where all witnesses were cross-examined. A further hearing was held in Sydney on 23 January 2026 for closing submissions. I granted permission for Richemont to be represented by a lawyer at the hearings. This was opposed by Mr Farddoust. My reasons for granting permission are set out in an email sent to the parties from my chambers on 4 December 2025.

[4] There is no dispute, and I find for the purposes of s.396 of the FW Act that:

• Mr Farddoust's application was filed within 21 days of his dismissal taking effect.
• Mr Farddoust was a person protected from unfair dismissal.
  • The Small Business Fair Dismissal Code is not relevant because Richemont is not a small business.
• Mr Farddoust's dismissal was not a case of genuine redundancy.

[5] 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.

• [6] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[1]

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

• [7] In order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded"[2] and should not be "capricious, fanciful, spiteful or prejudiced."[3] 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.[4]

• [8] Where a dismissal relates to an employee's conduct, the Commission must be satisfied that the conduct occurred and justified termination.[5] 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.[6]

• [9] Richemont's employees are required to record their hours of work using a Kronos application which is installed on their company phone. The application has a GPS function which means it can only be used when an employee is in the vicinity of the relevant store. The system means an employee cannot clock on for work if they have not arrived at the store and cannot clock off for work if they left the store. The Kronos system had been in place for several years, but Richemont implemented stricter processes from 1 July 2025 to address non-compliance issues.[7] Employees were required to ensure they clock on and off at the beginning and end of the workday and at the beginning and end of breaks. The training materials filed by Richemont confirm that employees were advised that managers were not allowed to adjust punch records.[8]

• [10] Mr Farddoust accepted in cross-examination that he manually adjusted Kronos timekeeping records to reflect starting and finishing times that did not reflect when he was arriving at the boutique and leaving the boutique.[9] Richemont provided evidence which clearly establishes this was the case. Richemont used CCTV footage to identify the times that Mr Farddoust had arrived at work and left the store from 30 June 2025 to 27 July 2025. Richemont provided Kronos system records which showed Mr Farddoust had manually adjusted the working times recorded in the Kronos system on thirteen occasions to reflect times that were not consistent with the CCTV footage. Mr Farddoust manually adjusted the records to reflect that he was physically present in the store when that was not the case.

• [11] Mr Farddoust's explanations for why he manually changed the Kronos records were not consistent. Mr Farddoust referred to manually adjusting entries because the Kronos application was not working properly.[10] Mr Farddoust referred to making the adjustments to reflect a time off in lieu system that he administered for his working hours.[11] Mr Farddoust referred to attending client lunches away from the store.[12] Mr Farddoust referred to his family commitments and medical appointments.[13] Mr Farddoust referred to "creating efficiency through my workflow and payroll."[14] Mr Farddoust referred to attending HR-mandated training away from the store.[15]

[12] I consider that Mr Farddoust's explanations for why he manually adjusted the Kronos records varied because there is no adequate explanation for what he was doing. Mr Farddoust's explanations are essentially directed at why he arrived late or left early. These explanations may be legitimate reasons to be away from the store. However, Mr Farddoust has not been able to explain why he repeatedly manually adjusted Kronos records to reflect times that he was not at the store. If Mr Farddoust had left the store to take time off in lieu, Mr Farddoust did not need to amend the Kronos records to suggest he was at the store when he was not. Likewise, if Mr Farddoust had left the store to attend to caring obligations, Mr Farddoust did not need to amend the records to suggest he was at the store when he was not. Mr Farddoust could have left the accurate Kronos records and explained his actions if they were ever queried. I agree with the following sentiment expressed in Mr Els' evidence:

"As part of this consideration of the credibility of Mr Farddoust's response, it did not make sense to me why, if there had been a flexible working arrangement in place, Mr Farddoust would then need to change his clock in and clock out times on Kronos. If it was formally agreed that he could arrive late or leave early, then the Kronos system should have reflected this. It is never the case within Richemont that an employee can manipulate a recording system."[16]

• [13] I do not accept there is evidence which establishes there were widespread problems with the Kronos application. Richemont provided evidence that Mr Farddoust and other employees were provided with options to raise concerns with the new Kronos requirements and that Mr Farddoust did not raise concerns.[17] In any event, the evidence indicates that the application was working and that Mr Farddoust was able to clock in and out on the relevant dates. The evidence suggests Mr Farddoust was manually altering times that had been accurately recorded in the system to reflect inaccurate times.

[14] Mr Farddoust focused heavily on a verbal agreement between himself and Mr Chalier about his flexible working arrangements. Mr Farddoust stated:

"To ensure payroll accuracy and avoid system confusion, I manually entered scheduled hours when the system failed. This method had been standard practice for years. Quentin verbally confirmed that I should continue with this method until the issues were resolved. That was said in front of the Assistant Boutique Manager."[18]

• [15] Mr Farddoust provided evidence that Mr Chalier told him at a meeting at the back of the store before July 2025 to keep "using Kronos as you have been".[19] Mr Chalier accepted a discussion about Kronos had occurred around the time identified by Mr Farddoust but had a different recollection of what was said at this meeting.[20] It appears an Assistant Store Manager may have been present for the meeting but neither party sought to lead evidence from the Assistant Store Manager.

[16] Even if Mr Farddoust's evidence about this conversation is accepted, I do not consider it establishes that Mr Chalier verbally agreed that he could manually adjust Kronos records to reflect inaccurate working times. Mr Farddoust's evidence that Mr Chalier referred to past practices continuing where the system fails does not establish that Mr Chalier knew Mr Farddoust had been maintaining inaccurate records and was endorsing a continuation of this conduct. Mr Farddoust does not suggest that Mr Chalier expressly stated it was permitted to manually record incorrect working times and it is extremely unlikely that a manager in Mr Chalier's position would make that statement. There is a substantial and important difference between a manager making a statement to the effect that there was no intention to prevent accurate manual adjustments to address system failures and a manager stating it is acceptable for employees to manually record incorrect working times.

• [17] Mr Farddoust referred to evidence from Mr Chalier that manual adjustments remained necessary in some circumstances after 1 July 2025, for example, where an employee forgot to clock in or out.[21] It is also clear that the system was not designed to prevent Mr Farddoust from being able to manually adjust the data. However, it is likely that any automated system such as Kronos would be required to have functions which allow corrections to be made where technical or other issues arise. In any event, none of these matters go to the critical issue of why Mr Farddoust used manual entries to input incorrect timekeeping data into the Kronos system. The case would be quite different if the evidence disclosed Mr Farddoust was manually amending the Kronos records to make them accurate. But that is not the case here. Mr Farddoust was manually adjusting the records to make them inaccurate.

• [18] Mr Farddoust referred to a history of taking carer's leave over several years as evidence that he was continuing to implement status quo arrangements.[22] However, this demonstrates that Mr Farddoust was aware that he could take carer's leave to deal with family commitments, and he knew how to input carer's leave in the Kronos system. The past practices do not explain why Mr Farddoust manually adjusted the Kronos records to record incorrect times without making any reference to the taking of carer's leave. The same problem arises with Mr Farddoust's explanation about taking time off in lieu. Mr Farddoust did not adjust the records to refer to him taking time off in lieu. Mr Farddoust adjusted the start and finish times for his regular working hours to indicate he was at the store when he was not at the store.

• [19] I find that Mr Farddoust's conduct in manually amending the Kronos records to reflect inaccurate working times provided a valid reason for his dismissal. Mr Farddoust deliberately and repeatedly created inaccurate business records for Richemont. That was a serious matter. I don't agree with Mr Farddoust's description of the concerns raised by Richemont as "petty allegations."[23] The existence of wilful or deliberate behaviour by Mr Farddoust also means there are "aggravating factors" and that termination of employment was not a sanction that was inconsistent with Richemont's APAC Disciplinary Framework.[24]

• [20] However, I do not agree with Richemont's description of Mr Farddoust's conduct as constituting theft and fraud.[25] I do not consider Mr Farddoust intended to achieve a financial benefit from his conduct. I consider Mr Farddoust did not agree that his working hours as a Boutique Director should be closely recorded or monitored by Richemont. Mr Farddoust has made it clear he does not consider the requirements of the Boutique Director role are consistent with a clocking on and off arrangement.[26] That attitude was reflected in how Mr Farddoust responded to Ms Haddo's queries about whether he was recording his hours in Kronos during a meeting on 14 July 2025. Mr Farddoust became defensive and indicated he did not want to speak further about Kronos.[27] I consider Mr Farddoust's conduct was a misguided attempt to push back against the record keeping requirements and that Mr Farddoust did not fully appreciate the seriousness of creating incorrect business records. Mr Farddoust seems to have had a view that because the boutique was performing well, the timekeeping records were not important. That view reflects a lapse in judgment from Mr Farddoust. I do not consider it constitutes theft and fraud. That is particularly the case given Mr Farddoust was paid an annual salary and derived a significant portion of his earnings from commissions. Mr Farddoust's earning were not directly impacted by the manual adjustments he made.

• [21] I do not consider the evidence is clear in relation to whether Mr Farddoust committed misconduct by commencing work late, finishing early, or in relation to the early closing of the boutique. It is clear Mr Farddoust had a significant degree of autonomy in relation to the management of the boutique and that Mr Farddoust had been adopting a flexible approach to his working hours for a lengthy period.[28] I also consider the evidence about the closing of the boutique does not clearly demonstrate that anything untoward was occurring. The latest Boutique Internal Control Review Report determined that boutique closing procedures were satisfactory.[29] Richemont's witnesses did not appear overly familiar with the closing practices for the boutique and Mr Farddoust was adamant that the practices at the boutique were impacted by the practices in the adjacent stores.[30] I am not satisfied there was a valid reason for dismissal in relation to Mr Farddoust starting work late or finishing early or in relation to compliance with the store closing procedures. If these had been the only instances of misconduct relied on by Richemont, I would not have found there was a valid reason for dismissal.

[22] I have found there was a valid reason for dismissal because Mr Farddoust deliberately and repeatedly created inaccurate business records for Richemont. This factor weighs in favour of finding Mr Farddoust's dismissal was not harsh, unjust, or unreasonable.

Was Mr Farddoust notified of the reason for dismissal?

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

• [24] 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]

• [25] I find Mr Farddoust was notified of the reason for dismissal before the final decision was made to terminate his employment. Mr Farddoust was notified that Richemont considered he had been manually entering incorrect working hours into the Kronos system during a meeting on 14 August 2025. Mr Farddoust was provided with a show cause letter at the end of the meeting on 14 August 2025. These steps occurred before Mr Els made the final decision to terminate Mr Farddoust's employment on or after 21 August 2025.[35]

[26] I find this factor weighs in favour of finding Mr Farddoust's dismissal was not harsh, unjust, or unreasonable.

Was Mr Farddoust given an opportunity to respond to the reason?

[27] 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.[36]

• [28] 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.[37] 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.[38]

• [29] I find Mr Farddoust was provided with an opportunity to respond to the reasons for his dismissal. Mr Farddoust responded in detail to the show cause letter on 17 August 2025. Mr Farddoust then attended a meeting with Ms Haddo and Glady Cruz (Head of Human Resources) on 18 August 2025 where his written response was discussed.[39]

• [30] I reject Mr Farddoust's submissions that the outcome was a foregone conclusion from the time the investigation commenced. The documentary evidence demonstrates Richemont genuinely considered Mr Farddoust's responses and collected further information in response to issues that he raised.[40]

[31] Mr Farddoust also referred to staff members who raised complaints about him not being interviewed as part of the investigation process. I do not consider anything significant turns on this because the staff members could not explain why Mr Farddoust was manually recording incorrect hours of work.

[32] I find this factor weighs in favour of finding Mr Farddoust's dismissal was not harsh, unjust, or unreasonable.

Did Richemont unreasonably refuse to allow Mr Farddoust to have a support person present to assist at discussions relating to the dismissal?

[33] Mr Farddoust was provided with an opportunity to bring a support person to the meeting held on 18 August 2025 to discuss his response to the allegations. Mr Farddoust declined that opportunity.

Was Mr Farddoust warned about unsatisfactory performance before the dismissal?

[35] Mr Farddoust was dismissed for misconduct as opposed to unsatisfactory performance. I consider this to be a neutral factor.

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

[36] Richemont is a very large business. I consider that Richemont followed appropriate procedures in relation to Mr Farddoust's dismissal. I consider this to be a neutral factor.

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

[37] Richemont has dedicated human resource specialists and expertise. I consider that Richemont followed appropriate procedures in relation to Mr Farddoust's dismissal. I consider this to be a neutral factor.

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

[39] I consider Mr Farddoust's high level of performance in a very responsible position for nearly three years is a factor that weighs in favour of finding Mr Farddoust's dismissal was harsh.

[40] I consider the fact that the new stricter obligations concerning the Kronos system only came into place on 1 July 2025 is a factor that weighs marginally in favour of finding Mr Farddoust's dismissal was harsh. I use the term marginally because there is no evidence it was acceptable to create incorrect business records before the new requirements commenced.

[41] I consider the family responsibilities that Mr Farddoust was dealing with around the time of the relevant events in July 2025 is a factor that weighs in favour of finding the dismissal was harsh.

[42] I consider Mr Farddoust's lack of significant insight into the inappropriateness and seriousness of creating incorrect business records weighs against finding Mr Farddoust's dismissal was harsh. This is not a case where Mr Farddoust immediately accepted that manually recording incorrect hours in the Kronos system was a serious mistake. Mr Farddoust has instead provided an array of explanations to argue his conduct was not inappropriate. Even during closing submissions, Mr Farddoust downplayed the seriousness of his conduct by saying it was "not perfect". I consider that is a significant understatement.

• [43] I accept Ms Haddo's evidence that she tried to informally discuss the need to comply with the new Kronos requirements with Mr Farddoust during a meeting on 14 July 2025 and that Mr Farddoust shut down the conversation and indicated everything was in hand. If Mr Farddoust had taken this opportunity to discuss his concerns, events may have transpired differently. I find Mr Farddoust's failure to take this opportunity to raise his concerns weighs in favour of finding the dismissal was not harsh.[41]

[44] Mr Farddoust relied heavily on his allegations against Mr Chalier as part of his defence to the allegations. However, I do not consider Mr Farddoust's actions can be excused even if he is right about alleged deficiencies with Mr Chalier's management. I do not consider the allegations against Mr Chalier are overly relevant to determining whether Mr Farddoust was unfairly dismissed.

[45] 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.[42]

[46] I find that Mr Farddoust's dismissal was not harsh, unjust, or unreasonable. Although there are several other matters that support a finding of harshness, I do not consider a finding of harshness is appropriate in all the circumstances. I have found that there was a valid reason for Mr Farddoust's dismissal and I consider Mr Farddoust's misconduct in repeatedly and deliberately entering incorrect information into the Kronos system was serious. If Mr Farddoust had immediately acknowledged this conduct was a serious error of judgment, I may have determined the dismissal was harsh in all the circumstances. That did not occur in this case.

[47] I find that Mr Farddoust was not unfairly dismissed by Richemont.

[48] Mr Farddoust's application is dismissed.

Ms A Shields and Ms J Mackenzie from Norton Rose Fulbright representing Richemont.

[1] 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].

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

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

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

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

[11] Transcript at PN105, PN106 and PN109.

[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).

[36] 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].

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

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

[39] Exhibit R2 at [32] to [35], Mr Farddoust's response is at DHB page 353 to 356.

[42] 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].

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