FWC emphasises importance of proper dismissal procedures for all employees
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving two brothers who worked as casual employees while also being shareholders in the business. The workers claimed they were unfairly dismissed without notice or explanation after the business temporarily closed.
The workers argued they never received any termination letter and only discovered they had been dismissed when they were excluded from staff communications after the business reopened. They maintained they had closed the business temporarily due to circumstances beyond their control, which their employer later characterized as serious misconduct.
The case raised important questions about casual workers' rights, proper dismissal procedures for small businesses, and what constitutes valid grounds for summary dismissal under Australian employment law.
The employer objected to the unfair dismissal claims, arguing the brothers were casual employees who didn't work regular hours and had no reasonable expectation of ongoing employment. This objection was rejected by the FWC.
The workers successfully demonstrated they maintained a stable work schedule, working between 30-60 hours weekly. They provided evidence including work rosters issued in advance, showing their shifts were pre-planned rather than allocated on an ad-hoc basis.
The Commission found that despite being casual employees, the workers had protection under unfair dismissal provisions because of their regular and systematic work patterns over a 12-month period.
The FWC stated: "I am satisfied and find that [the workers], as shareholders and the actual operators of the Yarrawonga shop, would have had an expectation that their employment would continue, particularly when they were both working in excess of an ordinary 38-hour week on a regular basis."
The brothers worked at a chicken shop in Darwin trading as "One Waffle + Two Peck Crispy Chicken," where they each owned 20% of the business. The employer claimed the workers were dismissed for serious misconduct, specifically unauthorized closure during busy lunch hours and failing to remit cash sales.
The workers presented evidence that they closed the shop because there was no inventory to sell after the employer repeatedly failed to restock supplies despite warnings. The Commission accepted this explanation, noting "it would be of limited utility to keep a takeaway chicken shop open if there was no chicken to sell."
The brothers stated they were excluded from the staff scheduling WeChat group when the shop reopened and only learned the alleged reason for their dismissal when the employer filed documents with the FWC. The Commission found the employer's purported termination letter was "an unusual termination letter" that the workers may have had difficulty understanding as English was not their first language.
The Commission also noted inconsistencies in the employer's claim about reporting alleged theft to police, finding the report was actually made weeks after the dismissal and concerned trespass, not theft.
The Small Business Fair Dismissal Code permits immediate dismissal for serious misconduct, but the Commission found the employer failed to comply with basic procedural requirements.
The employer claimed the workers had indicated during a company meeting that they no longer wished to continue in their roles. However, they couldn't provide any supporting documentation such as meeting minutes or signed resignation statements.
The Commission found: "I am also satisfied and find that [the workers] were not provided with their statutory entitlement to procedural fairness. I do not accept that [the workers] were sent their dismissal notices on 12 July. Further, even if [the workers] did receive this correspondence, [the workers] were not provided with an opportunity to respond to any allegation of serious misconduct prior to their summary termination."
The FWC determined the workers had been unfairly dismissed and awarded compensation instead of reinstatement since the workers had relocated to Melbourne and found new employment.
The Commission stated: "I have determined that [the workers] are entitled to each be paid 4 weeks' compensation. This 4 weeks comprises of 2 weeks' pay for the absolute lack of procedural fairness that was afforded to [the workers] by [the employer], plus an additional two weeks as compensation for their unfair dismissals."
Though the workers sought additional compensation for emotional stress and reputational damage, the Commission clarified it had "no capacity to make an order for emotional stress or reputational damage."
The Commission concluded: "I am satisfied and find that [the employer] did not have a valid reason to terminate [the workers]. I am satisfied and find that [the employer] did not provide [the workers] with a fair go all round... I find that [the workers'] terminations were harsh, unjust and unreasonable."
The final order required the employer to pay each worker 4 weeks' compensation plus superannuation, reflecting both the procedural failings and the substantively unfair nature of the dismissals.
