A dispute between an employer and an employee as to whether an employee has been overpaid and should repay the moneys will not necessarily be a valid reason for the employee’s dismissal, as is clear from the following extract from a decision of the Fair Work Commission.
“Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
 In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 5 and should not be “capricious, fanciful, spiteful or prejudiced.”6 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.7
 Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.8 “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.” 9
 On the evidence before the Commission, I have concluded that the Applicant was terminated at the initiative of the Respondent on 23 August 2020 with immediate effect. The Applicant claimed that the reason for her dismissal was because she did not agree to repay an amount of money which the Respondent considered it had overpaid to her. The Applicant gave evidence that her refusal to repay the money was on account of advice she had received to the effect she did not owe any money. Prior to the final dismissal discussion of 23 August 2020, she had requested that the Respondent explain the reasons why it said that she owed it money, presumably so that she could take further advice about the matter. The Respondent did not oblige this request and the Applicant was told in no uncertain terms not to come back to work if she did not agree to repay the money alleged to have been owed.
 On the best evidence before the Commission which, at the Respondent’s election, is unanswered, and in all the circumstances, I find that there was no valid reason for the dismissal related to the Applicant’s capacity or conduct……………………….
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
 I have made findings in relation to each matter specified in s.387 as relevant.
 I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 13
 Having considered each of the matters specified in s.387 of the Act, I am satisfied that the dismissal of the Applicant was harsh, unjust and unreasonable because there was no valid reason for her dismissal related to her capacity or conduct, there was no genuine redundancy of her position, she was not afforded procedural fairness in the process leading up to her dismissal and the dismissal has had harsh consequences for the Applicant, namely a sustained period of unemployment.
Conclusion on unfair dismissal
 I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of s.385 of the Act.”
Sibeko v Eleano Staff Pty Ltd  FWC 1071 delivered 26 February 2021 per Mansini DP