This is a particularly interesting unfair dismissal decision of the Fair Work Commission for a number of reasons including that the Commission concluded that the dismissal was relevantly unfair despite the Commission criticising some of the applicant’s conduct and reducing the amount of compensation by 50 per cent as a result.
“”Application for an unfair dismissal remedy
[1]
An application was filed on 7 September 2025 (the Application) by Ms Fariba Mitra Ismaeli (the Applicant), pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act), following her dismissal on 2 September 2025 by Seaway HCO Pty Ltd (the Respondent). The Applicant had commenced employment with the Respondent on 22 March 2022, in the position of Import Customer Service Officer on a full-time basis.
[2]
On 24 November 2025, directions were issued to program the manner in which the Application was to proceed to hearing (the Directions). Pursuant to the Directions, the parties filed the following documents:
(a) On 8 December 2025, the Applicant filed an Outline of Submissions, together with a Statement of the Applicant also dated 8 December 2025.
(b) On 17 February 2026, the Respondent filed an Outline of Submissions, together with statements, all dated 11 February 2026, from:
(i)
Kate Garland, Human Resources Business Partner of the Respondent; and
(ii)
Ariella Witty, Import Sea and Air Customer Service Manager, who was the Applicant’s direct Manager from 23 October 2024.
(c) The Applicant filed a Reply Statement on 20 February 2026.
[3]
The matter was heard on 24 February 2026 (the Hearing). Each of the deponents of statements were required for cross-examination.
Background
[4]
The Applicant commenced employment with the Respondent on 22 March 2022 in the position of Import Sea Customer Service. Throughout her early years of employment, she
[2026] FWC 601
DECISION
[2026] FWC 601
2
consistently met performance expectations, received positive feedback from customers, and had no disciplinary issues while working under the first two managers.
[5]
Ms Witty was employed by the Respondent and was the Applicant’s direct Manager from 23 October 2024.
[6]
On 8 November 2024, Ms Witty met with Applicant to gain an understanding of how the Flexport account was being managed. Required improvements were discussed.
[7]
On 7 January 2025, Ms Witty met with the Applicant. An email was subsequently sent by Ms Witty to the Applicant that summarised that meeting. The email provided:
Thanks for your time and per our discussion today aligning on expectations for Flexport.
I have checked the status of invoicing for Flexport and it seems for DEC arrivals, you have raised only 1 invoice, with all the other invoices raised for prior months.
There were reminders sent within the month and instructions to ensure invoicing every day so we don’t again end up with a big backlog -I need you to please ensure you are invoicing every day, please put a calendar event in your calendar for a time each day for 45min in which to invoice – if you do 3-4 invoices each day it will be enough to get through the month. So I can keep track that this is being completed, please confirm back to me once you have set up your calendar reminder and each day please send me an email once your invoicing has been completed and no. of invoices issued
Flexport Seafreight job numbers average 70-75 jobs per month, even with the extra work of having to go into FFA portal these numbers are very manageable and the expectation is that you are completing all the tasks to manage the Flexport account, including invoicing and issue resolution
If there are other issues such as repeated document chasing please ensure these are entered onto the issue log and addresses with Flexport during your weekly meeting- please ensure you send me the meeting minutes from your meeting each week so I can keep up with what is going on. If you are not getting anywhere with certain issues, please escalate to me and I can assist with addressing these with Flexport.
Below needs immediate attention please
55 x DEC Invoice to raise ASAP
25 x SEP/OCT/NOV jobs not finalised or have additional charges to be billed out
20 x JAN invoices to begin working on
[Emphasis omitted]
[8]
On 22 January 2025, Ms Witty emailed the Applicant requesting an update on the number of invoices raised that day, noting that she had not received any daily summaries. Ms Witty also followed up on why no January invoices had yet been billed. The Applicant responded that she had been busy with other tasks and could only complete invoicing after hours. Ms Witty provided guidance on how to manage this workload, including using the PAVE system.
[2026] FWC 601
3
[9]
On 3 February 2025, Ms Witty met with the Applicant. On 4 February 2025, the Applicant received a Formal Written Warning that included the following:
Subject: Formal Written Warning
Dear Fariba,
This letter is to confirm the details of our meeting on Monday 3rd February 2025, during which your recent performance was discussed as well as actions for you to take to ensure you are meeting the expectations of your role. This meeting follows several earlier catch ups and discussions we have had together over recent months, including email communication as recently as 7th January 2025.
During this meeting several issues were raised in relation to your performance. These instances have significant impacts on our customers, your team and the business. In your case we discussed the following instances and their impacts:
• Despite numerous requests you have not been providing me daily updates on invoices raised each day. As per previous conversations you were asked to set aside 45 minutes every day to complete invoices. At the time of our conversation this had not been completed, resulting in a backlog of invoices.
• We discussed the large amount of money paid out and not billed within a timely manner, upwards of $150,000. Disbursements must be a priority moving forward.
• Ongoing performance issues with the management of the Flexport account.
• Delivery address verified tasks are rarely closed/actioned, resulting in delays and additional work for other team members.
• There have been multiple occasions where there were errors and oversights made on bookings resulting in clearance issues and storage costs. Subsequently both instances saw a cost to the business of over $2,000.
You were provided with the opportunity to provide your account of the situation, and while I appreciate you taking full responsibility for mistakes made, simply forgetting to complete tasks on time or missing critical components of your role is unacceptable. As a result, this letter serves as a formal written warning.
As discussed, I want to support you in executing your role and assist you where possible. To support you in performing your role to a satisfactory level, please feel free to contact me should you have any questions or concerns pertaining to your job functions. I am happy to provide additional guidance you need; however, we do require you to demonstrate improvement in your job performance as we outlined in the meeting. This includes adhering to all SEAWAY policies, procedures and directions without exemption, appropriately actioning all tasks, looking closely at your work to identify and correct errors, spot and improve weakness and overall improving your attention to details.
As part of this formal review process, you agreed to undertake the following improvement actions:
• Set time aside each day to complete invoices. Email me at the end of the day to advise invoices completed and actioned.
• Complete vendor invoices in a timely manner via Shipamax
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• Ensure you update all Transport invoices/POD’s to Cargowise eDocs
• if there are delays communicate to the client in a timely and transparent manner. If you are unsure how to respond say “I am not sure and will come back to you.”
These performance improvements are expected to be implemented immediately and will be formally reviewed in four weeks’ time on Wednesday 5th March 2025. We expect to see an improvement in your performance in each of the areas outlined above. Please be advised that should your performance not improve, further disciplinary action may be taken against you, which may include the termination of your employment. We trust that you will respond positively and that further disciplinary action will not be necessary.
[Emphasis added]
[10]
On 5 February 2025, the Applicant challenged the issuance of the Formal Written Warning, as follows:
Thanks for sending this through, however, from our discussion on Monday 3/02, I learnt that if there is ongoing performance issues and improvement was not made then it will result in a formal warning. Why has this suddenly changed?
In regards to being formally warned for storage, I will not accept that as I have seen countless occasions where colleagues have made errors which resulted in some much higher storage costs and were not reprimanded at all. Why am I being made an example of?
To give you further examples, on Sunday I worked for 6 hours to try and regain control of invoicing . This is not the first time, I work on weekend, almost every evening, I never complain about this despite the right to disconnect and I understand that no one is asking me to do this but to be serious Ariella if I don’t do this there would be worse consequences than listed below.
I have been a dedicated team member of the CSU team at Seaway for almost 3 years, I have constantly put my hand up to help others, taken on further work to assist absenteeism and always ensured I delivered a high standard of work. Why have these attributes not been taken into account, ever formally awarded or recognised? Instead I feel I am now being punished.
Moreover, I have not once been reprimanded in those three years so this clearly shows there is something wrong with the workload.
For the reasons I have stated above I will not be signing this letter as in this occasion I believe it to be unfair and not appropriate.
I am available anytime to discuss how the workload can be better managed, meaning I need assistance and I really look forward to you supporting me on that.
[Emphasis added]
[11]
On 7 February 2025, Ms Witty responded to the above email, in part, as follows:
[2026] FWC 601
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Thanks for your time this morning, as discussed, the business has decided to issue the Warning letter based on facts as discussed previously. It was clearly communicated to you in my email dated 3″ Feb 25.
In saying that, the business is looking to support you and as such we are taking steps to review the Flexport account, with possible changes to transport management and invoicing responsibilities. Once we know how these changes will affect the overall management of the account, we will document the process by way of an SOP, and implement any efficiencies while reviewing the processes.
The best outcome will be for you to be able manage the workload within business hours, we are looking for improvements from your side as well to ensure no further disciplinary action is required.
…
[12]
In March 2025, the Respondent outsourced the updating of the Flexport portal to a third-party transport company. That outsourcing had the effect of reducing the Applicant’s workload.
[13]
On 16 April 2025, a Performance Appraisal was completed for the Applicant. The Applicant was only scored as “meeting expectations” in two of ten categories, while she was scored as “almost meeting expectations” in four of ten categories, but “below expectations” in the categories of:
Communication
Dependability & Teamwork
Resourcefulness & Initiative; and
Attitude
[14]
On 6 May 2025, Ms Witty became aware that the Applicant was still not using a system called PAVE to manage her day-to-day activities, and that she was instead using a system called Workbench. On 20 May 2025, Ms Witty sent an email to the Applicant as follows:
Good afternoon,
I can see you still have a large number of PAVE tasks overdue, if you remember that we had discussions earlier in the year about the requirement to use PAVE. Please see attached and below and please ensure overdue PAVE tasks are actioned/re-assigned ASAP,
[15]
On 10 July 2025, Ms Witty met with the Applicant regarding what was described as “Expectations”. An email was subsequently sent by Ms Witty to the Applicant that summarised that meeting. The email provided:
Thanks for your time to review expectations and align on these
Note: Flexport job numbers have increased and you are chasing over and over for the same things, I am happy to help escalate any issues but if I don’t know I can’t help
– Fariba to discuss why Flexport are not using missing doc report, Fariba is not using the missing doc report either – this report needs to be used on both side to expedite doc chasing
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– Flexport meetings – weekly – Fariba not sending me updates as requested – highlight any issues to me to take up with Flexport management
– Feedback from MI4U
o New Flexport clients – ORG not set up correctly – instructions from AW to Fariba to contact the client even if no details in Portal (& if all else fails a Google search) which must be done prior to transport handling the client for the first time Fariba agreed to do this
– Incorrect invoicing, too many credits lots due to billing mistakes i.e. Drop mode not billed correctly
– Not checking transport invoices are correct and querying incorrect charges – causing GP leakages and loss on jobs E.G FLEX-3098435
– Invoicing – not being actioned daily or updated being sent daily as requested twice 18/6 & 30/6 – Fariba mentions she is behind with too much work and cleaning up PAVE, however, I advised Fariba she needs to make time to invoice for 30 min each day (3-5 invoice each day)
– Copying in Flexport to internal communication, agreed not to do this again
– PAVE board not being actioned, over 130 overdue PAVE items
[16]
The following day, on 11 July 2025, Ms Witty provided the Applicant with a list of urgent invoices that required completion in one business day.
[17]
On 18 July 2025, after not receiving requested invoices, Ms Witty sent an email to the Applicant as follows:
Good morning, I have not received your daily invoice update once (except from Monday) since being asked to on 18 June, as requested many times now, please ensure you send me the list of invoices you have issued each day by COB that day.
[18]
On 28 July 2025, after not receiving requested invoices, Ms Witty sent an email to the Applicant as follows:
I am not receiving your daily invoicing emails as requested on many occasions, this request was introduced to ensure you were invoicing on a daily basis, which looking at the below does not seem to be happening, we have 3 days remaining until the end of the month, where all the below invoicing needs to be completed.
As specified before all the other work can wait for 30-40 min per day while you concentrate on invoicing.
I again request that you send me your daily invoice job numbers at the end of each day so I know you are working on this and that this will be completed.
[19]
On 30 July 2025, Ms Witty and Mr Salmon met with the Applicant regarding what was described as “Expectations”. An email was subsequently sent by Ms Witty to the Applicant that summarised that meeting. The email provided in part:
Thanks for meeting with David and I earlier today.
Please see below items that were discussed with regards to expectations around your work and overdue tasks
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–
Invoicing must be completed each day, as already suggested please block out 30-60 min in your calendars each day and switch off all other distractions such as Outlook, as you mentioned it is these other distractions causing you to not be able to invoice during the day
–
Daily invoicing emails to be sent to Ariella listing only the jobs that you have invoiced that day
– Invoicing of all July and prior months to be completed and must be the priority from today until month end (COB tomorrow)
– From today the use of PAVE is mandatory and must be kept up to date – Dianne will show you an alternate way to review and action your PAVE tasks
– Any PAVE tasks that don’t belong to you must be re allocated – refer below current PAVE tasks due up to today, as you can see majority are correctly assigned and for you to action
– Please send a list of tasks you perform daily/weekly to David and myself no later than next Tuesday COB so we can review & provide comments/process improvements etc
– Fariba to send Ariella weekly meeting notes from your meeting with Flexport (where Ariella was not in attendance) highlighting any areas for FYI/Support
[Emphasis in original]
[20]
On 25 August 2025, Ms Witty contacted the Applicant by email regarding Flexport Cartage. That email provided:
Good morning.
As of today, there have been 103 shipments registered for Flexport, which works out to around 6-7 jobs per day for you to review, follow up on documents, and ensure we have the details needed for the ORG set up. With HoiT covering the mailbox and new registrations, and with no responsibilities for Order Management, Transport, FFA portal updates, or invoicing (from 13th Aug), your main focus can really be on Shipamax, PAVE etc.
As we’ve discussed, it’s really important that you dedicate consistent time each day to managing the invoicing. Now that the Invoicing team are issuing invoices, your timely vetting and posting of transport invoices is a key step that helps them complete their work and meet their KPls.
I also want to acknowledge that Dianne has already helped you work through overdue PAVE tasks and has shared training and tips to make this process smoother and more efficient for you. Please continue to use those tools and don’t hesitate to reach out if you hit any roadblocks-I want to make sure you feel supported in managing these responsibilities successfully.
[21]
The Applicant responded to the above email as follows:
I removed Cec as I don’t think she needs to be copied in these communications and cc’ed Dianne instead as she has witnessed, to some extent, on what we are going thru with Flexport jobs.
Again you are highlighting the No of jobs in here which I’m sick of repeating that it is not about the Nos but the work amount each job involved, beside what is going on in background.
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Good example this morning when I tried to ignore my emails just focusing on invoicing but with the no of inquiries from customs brokers, transport, Flexport contacts etc. I had to drop invoicing again and chase docs or get agents to amend docs to pass on to brokers.
There is also queries on invoices received from Ml4U4 that I needed clarifications before I get them posted.
Everyday is the same, honestly we need someone just chase docs and another one to do invoicing as doing both at the same time is not possible and I cannot push myself more.
Now just cutting it short I could manage to do some invoicing as per below jobs and will continue to do as much as I can tonight.
Happy to discuss this further with yourself and Dianne once we are all at the office.
[22]
The Respondent replied to the above email as follows:
Hi Fariba,
Thank you for sharing your thoughts. As we’ve discussed before, company systems like PAVE are designed to make your workload easier to manage and to help you stay on top of priorities.
I can see that at the moment you have 81 tasks overdue. This suggests that PAVE isn’t being fully used to manage your day-to-day activities. If you build the habit of working through PAVE consistently, it will reduce the number of follow-ups and questions you’re receiving about outstanding tasks, because your work will already be up to date.
Looking ahead at your task list for the rest of the week, there are only a few tasks each day needed to bring everything back on track. Approaching your workload this way should help you feel more in control and lessen the pressure from both internal teams and external parties.
To support you in achieving this, we’ve simplified your responsibilities by removing a number of tasks from your workload:
• Transport tasks
• FFA portal updates
• Invoicing responsibilities (from ETA 14th Aug)
• Quote requests (now managed by Dianne)
• Flexport queries (Dianne taking the lead on any question or queries)
• Management of supplier Ml4U (Ariella and Dianne now taking the lead)
With these adjustments, the focus is now on using PAVE to manage your tasks effectively. This approach should also give you the time and space to stay on top of other responsibilities such as Invoicing and Shipamax. I’m confident that with this structure, you’ll find it easier to manage your priorities.
In addition, during our meeting with David Salmon, Head of ISA, it was agreed that you would send your daily task list through to both David and myself so we could provide further support in reviewing and assessing your workload. To date, we haven’t received this from you, even after a reminder, which makes it harder for us to give you the level
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of assistance we had planned.
[Emphasis added]
[23]
As referred to in the above email, from 25 August 2025, Ms Witty decided to further simplify the Applicant’s responsibilities by reducing her tasks to allow for her to focus and have the time to stay on top of other responsibilities. Tasks removed from the Applicant’s responsibilities included handing over invoicing to the invoicing team, and management of all quote requests, client queries and management of trucks by Ms Witty or Ms Ross (Customer Service Supervisor).
[24]
On 2 September 2025, Ms Garland and Mr Salmon met with the Applicant. The invitation email for that meeting stated “This meeting is being held to discuss your performance and position with Seaway. Please note you are welcome to bring a support person to this meeting and please note David Salmon and Kate Gartland will also be in attendance”. During that meeting the Applicant’s employment was terminated (the Termination Meeting). The Respondent thereafter forwarded by email to the Applicant a termination letter (the Termination Letter), which provided:
Further to our meeting held today with myself, David Salmon (Head of Import Sea & Air) and Kate Gartland (HR Business Partner) this letter is to confirm that your employment with SEAWAY will conclude today, 2nd September 2025.
This termination is due to continued underperformance and not meeting the minimum requirements of your role. It follows prior discussions and meetings where performance expectations, gaps, and required improvements were clearly outlined. These matters were also formally documented in the Warning Letter dated 4th February 2025 and subsequent expectations meetings on the 10th July 2025 and 30th July 2025 (in which David Salmon
was also present).
In summary, our conversation today covered:
• You chose to have a support person present at the meeting, at your request, Laura Amendolia (Transport Manager) attended the meeting as your support person.
• Despite numerous requests over the last six months, you have not been providing daily updates on invoices raised. You have stated that you are too busy to prioritise invoicing, even though it has been clearly advised that invoicing 30–40 minutes per day is part of your day-to-day responsibilities. As previously discussed, you were asked to set aside time each day to complete invoices, but this has still not been done, resulting in a backlog.
• We discussed the key areas of underperformance which include not organising and clearing your invoicing tasks, not completing PAVE tasks and not managing Shipamax effectively, despite support from our Cebu team. This accompanied with overall speed and output falling below role expectations.
• To support you in achieving this, we simplified your responsibilities by removing a number of tasks from your workload, including transport tasks, FFA portal updates, invoicing responsibilities (from ETA 14th Aug), quote requests (now managed by Dianne), Flexport queries (Dianne taking the lead on any question or queries) and management of supplier MI4U (Myself and Dianne now taking the lead)
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• To support you, we streamlined your role by removing several tasks and shifting responsibilities to others, allowing you to focus on managing your priorities more effectively through PAVE and staying on top of core duties like Invoicing and Shipamax. Despite this there is still a backlog of tasks.
• As agreed with David Salmon, you were required to provide your daily task list to both David and myself to enable review and support of your workload. Despite reminders, you have failed to comply with this requirement. This lack of cooperation has limited our ability to provide the assistance intended and has
contributed to the decision to terminate your employment.
• You were given the opportunity to respond to these examples where you mentioned you weren’t clear on expectations however, we do not feel this is a valid reason, given the numerous in person discussions, and email chains requesting the above-mentioned improvements
• We confirmed SEAWAY can provide you with a statement of employment on request
• Before finalising the meeting, you were asked by Kate Gartland if you had any further questions you would like to add, or any other comments before we wrap up the meeting. You declined.
…
In line with the terms of your employment agreement you will receive a four-week payment in lieu of notice and will be paid for a full working day today, 2nd September. Final payment will be deposited into your bank account within 7 days, the details of which will be contained in a payment summary provided to you via email by Payroll.
[25]
At all relevant times, the Respondent had a Disciplinary Policy and Procedure (the DPP). Under the sub-heading “Disciplinary Action”, the DPP provided:
Disciplinary Action
Step 1- First warning
Where an employee’s work performance or conduct is considered unsatisfactory, the employee may be asked by their immediate manager or relevant Senior Manager to attend a disciplinary meeting. The employee should then have an opportunity to respond to the allegation(s).
If the manager/Senior Manager is unsatisfied with the employee’s response, a first written
warning may be issued to the employee advising of the nature of the poor performance or conduct and any corrective action required. This letter may also include the agreed support that the manager/Senior Manager will provide to the employee.
A date should be agreed upon in the future to review the employee’s performance or conduct.
Step 2 – Second warning
Where the employee fails to improve on their poor performance or conduct, the employee may again be asked by their immediate manager or relevant Senior Manager to attend a disciplinary meeting. The employee should then have an opportunity to respond to the allegation(s).
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If the manager/Senior Manager is unsatisfied with the employee’s response, a second written warning may be issued to the employee advising of the nature of the poor performance or conduct and any corrective action required. This letter should also outline the agreed support that the manager/Senior Manager will provide to the employee.
A date should be agreed upon in the future to review the employee’s performance or conduct.
Step 3 – Third and final warning
If an employee’s unsatisfactory work performance or conduct continues following two (2)
written warnings, the employee maybe asked by their immediate manager or relevant Senior Manager to attend a disciplinary meeting. The employee will then have an opportunity to respond to the allegation(s).
If the Manager/Senior Manager is unsatisfied with the employee’s response, a third and final written warning may be issued to the employee advising of the nature of the poor performance or conduct and any corrective action required. The warning should also advise the employee that should the unsatisfactory performance or conduct not improve, termination of employment will be considered. This letter should also outline the agreed support that the manager/Senior Manager will provide to the employee.
A date should be agreed upon in the future to review the employee’s performance or conduct.
[26]
The DPP also provided that the Respondent reserved the right to implement “alternative disciplinary measures” depending on the nature of the performance or conduct issue, which could be one, or a combination of, issuing an expectations letter, implementing a Performance Improvement Plan (PIP), issuing a First and Final Written Warning, or Instant Dismissal.
Applicant’s Submission
[27]
The Applicant submitted that her dismissal was unfair because:
(a) She was not provided with any performance management plan in a formal context and procedure;
(b) She was not provided with formal warnings prior to her dismissal;
(c) The reasons given were incorrect and misleading, and not based on evidence;
(d) The action was harsh, unjust and traumatic; and
(e) The Applicant felt she was targeted and singled out by new management based on the warning of February 2025, and her age and race.
[28]
The Applicant also relied upon medical evidence that she had experienced significant psychological distress following her dismissal.
Respondent’s Submission
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[29]
The Respondent submitted that evidence showed that the Applicant was subject to extensive documented performance management over a prolonged period, with clearly expressed expectations, coaching, reduction of tasks and follow-up.
[30]
The objective evidence from the Applicant’s managers, HR, and internal records confirmed ongoing under-performance, refusal to follow processes, and failure to meet minimum job requirements despite support, reduced tasks, offshoring arrangements, and multiple attempts to assist.
[31]
The Respondent submitted the decision to terminate was lawful, reasonable, procedurally fair, and fully consistent with Seaway’s policies and treatment of other employees.
Consideration
[32]
There are no jurisdictional objections to the Application being determined by the Commission. Specifically, I am satisfied that:
a)
the Applicant was dismissed at the initiative of the employer (ss 385(a) 386(1)(a));
b)
her unfair dismissal application was lodged within the 21-day statutory time limitation found at s 394(2) of the Act;
c)
the Applicant is a person protected from unfair dismissal in that:
i.
she had completed the minimum employment period set out in ss 382 and 383 of the Act; and
ii.
her income was below the high income threshold;
d)
her dismissal was not a case of genuine redundancy (s 385(d)); and
e)
her dismissal was not a case involving the Small Business Fair Dismissal Code, as the respondent employs more than 15 employees (s 385(c)).
[33]
The matters to be taken into account under s 387 of the Act in considering whether a dismissal was harsh, unjust or unreasonable, are:
(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
[2026] FWC 601
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(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.
Section 387(a) – whether there was a valid reason(s) for the applicant’s dismissal
[34]
In Rode v Burwood Mitsubishi,1 a Full Bench of the then Australian Industrial Relations Commission discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996, and referring to Selvachandran v Peteron Plastics Pty Ltd2 (Selvachandran). The Full Bench found:
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.
[35]
To be a valid reason, the reason for the dismissal should be sound, defensible or well founded and should not be capricious, fanciful, spiteful or prejudiced. However, the Commission will not stand in the shoes of the employer and determine what the Commission would do in the same position.
[36]
In Sydney Trains v Gary Hilder,3 (Hilder) the Full Bench summarised the well-established principles for determining such matters:4
“The principles applicable to the consideration required under s 387(a) are well
established, but they require reiteration here:
(1) A valid reason is one which is sound, defensible and well-founded, and not
capricious, fanciful, spiteful or prejudiced.
(2) When the reason for termination is based on the misconduct of the employee the
Commission must, if it is in issue in the proceedings, determine whether the conduct
occurred and what it involved.
(3) A reason would be valid because the conduct occurred and it justified termination.
There would not be a valid reason for termination because the conduct did not occur or
it did occur but did not justify termination (because, for example, it involved a trivial
misdemeanour).
[2026] FWC 601
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(4) For the purposes of s 387(a) it is not necessary to demonstrate misconduct
sufficiently serious to justify summary dismissal on the part of the employee in order to
demonstrate that there was a valid reason for the employee’s dismissal (although
established misconduct of this nature would undoubtedly be sufficient to constitute a
valid reason).
(5) Whether an employee’s conduct amounted to misconduct serious enough to give rise
to the right to summary dismissal under the terms of the employee’s contract of
employment is not relevant to the determination of whether there was a valid reason for
dismissal pursuant to s 387(a).
(6) The existence of a valid reason to dismiss is not assessed by reference to a legal right
to terminate a contract of employment.
(7) The criterion for a valid reason is not whether serious misconduct as defined in reg
1.07 has occurred, since reg 1.07 has no application to s 387(a).
(8) An assessment of the degree of seriousness of misconduct which is found to
constitute a valid reason for dismissal for the purposes of s 387(a) will be a relevant
matter under s 387(h). In that context the issue is whether dismissal was a proportionate
response to the conduct in question.
(9) Matters raised in mitigation of misconduct which has been found to have occurred
are not to be brought into account in relation to the specific consideration of valid reason
under s 387(a) but rather under s 387(h) as part of the overall consideration of whether
the dismissal is harsh, unjust or unreasonable.”
[37]
The reasons for termination were clearly outlined in the Termination Letter as continued underperformance and not meeting the minimum requirements of the Applicant’s role.
[38]
I find that the conduct alleged to have been engaged in by the Applicant actually occurred and justified dismissal. In particular:
(a) Despite numerous and repeated requests over approximately six months, the Applicant failed to provide daily updates of invoices raised. Her claim that she was too busy to prioritise invoicing was unacceptable in light of the numerous specific directions of her Managers to prioritise invoicing;
(b) Not using the PAVE system despite numerous specific directions to do so that resulted in her not completing PAVE tasks and not managing Shipamax effectively. That failure was particularly profound in the circumstances where the Respondent streamlined the Applicant’s role by removing several tasks and shifting responsibilities to others; and
(c) Simply failing, despite reminders, to provide daily task list to Management to enable review and support of her workload.
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Section 387(b) – Notification of the reason for the dismissal
[39]
The Applicant was notified of the reason for the dismissal in the Termination Meeting, and the Termination Letter that gave a detailed explanation of the reasons.
Section 387(c) – Opportunity to respond to any reason
[40]
The Applicant was provided with an opportunity to provide her response in the Termination Meeting.
Section 387(d) – Unreasonable refusal by the employer of a support person
[41]
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[42]
The Applicant chose to have a support person present at the meeting.
Section 387(e) – Unsatisfactory performance
[43]
The issues of unsatisfactory performance were the subject of numerous directions, instructions as to expectation, and the written warning of the Formal Written Warning of 3 February 2025.
[44]
The Applicant, however, challenged the sufficiency of the warnings of unsatisfactory performance, noting that she was not provided with any performance management plan in a formal context and procedure, and was not provided with formal warnings prior to her dismissal.
[45]
It is clear that the Applicant understood the effect of the Final Written Warning. Her evidence in proceedings was:
MR SPAGNOL: Thank you. Now, Ms Ismaeli, did you attend a meeting on 3 February 2005 – 2025, sorry – from the result of which you received a formal written warning in a letter dated 4 February 2025?
MRS ISMAELI: Yes, I did.
MR SPAGNOL: You did? Okay. And did that formal written warning refer to perform issues?
MRS ISMAELI: Yes. It does.
MR SPAGNOL: And did the formal written warning require immediate improvement from you in your role?
MRS ISMAELI: Yes.
MR SPAGNOL: And did you understand that the formal written warning was to be a warning about your performance?
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MRS ISMAELI: Actually, it was about my performance and also about the storage.
MR SPAGNOL: You disagreed with the outcome of being reprimanded. But you understood what the letter was, didn’t you?
MRS ISMAELI: I did.
MR SPAGNOL: That it was a formal warning?
MRS ISMAELI: Yes. I did agree.
[46]
The Applicant’s evidence was that she expected a second or final warning at the Termination Meeting.5 That the Applicant had such expectation was not unusual bearing in mind the Disciplinary Policy and Procedure, although the right to implement “alternative disciplinary measures”, which could be one, or a combination of, issuing an expectations letter, implementing a Performance Improvement Plan (PIP), issuing a First and Final Written Warning, or Instant Dismissal, would sustain the action actually taken.
[47]
Overall, however, I consider the failure to issue a final written warning to the Applicant outlining performance expectations was a denial of procedural fairness. While, based on the Applicant’s previous obdurate failure to comply with numerous clear directions and instructions, I do not consider that the Applicant would have complied with the directions in any final written warning, I consider such warning should have issued.
Sections 387(f) and 387(g) – The size of the employer’s enterprise/human resources
[48]
The Respondent is a relatively large employer, with access to dedicated human resource managers. I consider the size of the Respondent would not have affected the procedures followed in effecting the dismissal.
Section 387(h) – Other relevant matters
[49]
No other matters were submitted to fall for consideration within paragraph (h) of Section 387.
Conclusion
[50]
I have made findings in relation to all matters specified in s 387 of the Act 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 and therefore an unfair dismissal.
[51]
I have found the Respondent had a valid reason for the dismissal of the Applicant, that the Applicant was notified of the reasons, had an opportunity to respond, and had a support person.
[52]
The failure to issue a final written warning prior to dismissal, however, rendered the dismissal unjust and unreasonable. I therefore find that the dismissal of the Applicant was an Unfair Dismissal as defined by section 385 of the Act.
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Remedy
[53]
The circumstances as to when the Commission may order remedy for an unfair dismissal are set out in s.390 of the Act.
[54]
Section 390 is in the following terms:
390 When the FWC may order remedy for unfair dismissal
(1)
Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a)
the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b)
the person has been unfairly dismissed (see Division 3).
(2)
The FWC may make the order only if the person has made an application under section 394.
(3)
The FWC must not order the payment of compensation to the person unless:
(a)
the FWC is satisfied that reinstatement of the person is inappropriate; and
(b)
the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
[55]
In respect to s.390(1)(a), it is not in dispute that the Applicant was protected from unfair dismissal. In respect to s.390(1)(b), for the reasons set out above, I am satisfied that the Applicant has been unfairly dismissed, and the Applicant has made an application in satisfying s.390(2).
[56]
Having regard to the matters in s.390(3)(a), the Applicant does not seek reinstatement. Accordingly, I am satisfied that reinstatement is inappropriate.
[57]
Having regard to s.390(3)(b), I consider an order for compensation is appropriate in all the circumstances of the case. The matters to be taken into account in making an order for compensation are set out in s.392 of the Act as follows:
392 Remedy—compensation Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement. Criteria for deciding amounts
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(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant. Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct. Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal. Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6)
The amount is the total of the following amounts:
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(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled; (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
[58]
As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v
Humphries,6 the well-established approach to the assessment of compensation under s.392 of
the Act is to apply the “Sprigg formula” derived from the Australian Industrial Relations
Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket
(Sprigg).7 This approach was articulated in the context of the Act in Bowden v Ottrey Homes
Cobram and District Retirement Villages.8
The effect of the order on the validity of the employer’s enterprise – s.392(2)(a)
[59]
There was no submission that there would be any effect of the order on the viability of the employer’s enterprise.
The length of the person’s service with the employer – s.392(2)(b)
[60]
The Applicant’s period of employment was around three and a half years. The Applicant’s length of service does not weigh in favour of reducing or increasing the amount of compensation ordered.
The remuneration that the person would have received, or would have been likely to
receive, if the person had not been dismissed – s.392(2)(c)
[61]
The assessment of the length of continued employment is a discretionary decision. It is clear that by the time of the Applicant’s dismissal the relationship between the Applicant and Respondent had seriously deteriorated, to the extent that it was unlikely to continue for any significant period thereafter. While I have found that the failure to issue a final written warning to the Applicant outlining performance expectations was a denial of procedural fairness, I have not considered, based on the Applicant’s repeated refusals to comply with directions, that the Applicant would have complied with the directions in any final written warning.
[62]
In those circumstances, the Applicant’s employment would only have continued for a period to allow for procedural fairness to be afforded to the Applicant. I estimate that the Applicant’s employment would have continued for a further four weeks, which would allow for sufficient time for the Respondent to issue a final written warning to the Applicant and provide time for compliance with expectations and directions.
Mitigation/Remuneration Earned – s.392(2)(d) and (e)
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[63]
There was no evidence of mitigation by the Applicant, though that may have been due to the significant psychological distress following her dismissal that the Applicant suffered and that was outlined in the medical evidence relied upon by the Applicant.
Other Matters Relevant – 392(2)(g)
[64]
The Applicant received four weeks’ pay in lieu of notice. I make no deduction because of that payment as I consider that the Respondent would have made such notice payment after having accorded procedural fairness to the Applicant.
Misconduct reduces amount – 392(3)
[65]
Section 392(3) of the Act provides:
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
[66]
In Butterfly Systems Pty Ltd v Sergeev9 (Sergeev), the Full Bench of the Commission found:10
Two relevant considerations arise from the terms of the provision. Firstly, the specific use of the term “misconduct”, as opposed to “serious misconduct”, indicates that conduct of less severity than that encompassed in the definition of serious misconduct in Regulation 1.07 of the Fair Work Regulations 2009, is within the purview of the provision. Secondly, the provision requires the Commission to reduce the amount of compensation it would otherwise order by an appropriate amount, on account of misconduct, if satisfied that the misconduct contributed to the employer’s decision to dismiss.
[67]
The conduct of the Applicant constituting valid reasons satisfies the definition of misconduct, and contributed to the decision of the Respondent to dismiss her. I consider it appropriate that compensation ordered should be reduced by 50%.
Conclusion and order as to remedy
[68]
I consider that reinstatement is not an appropriate remedy and that an award of compensation is appropriate. I estimate the Applicant would have received a further four weeks’ remuneration had she not been terminated.
[69]
I make no deduction for contingencies, and consider the impact of taxation on the amount needs no accommodation.
[70]
The four weeks’ pay is reduced by 50% as a result of misconduct, leaving two weeks’ pay, subject to deduction of taxation (the Compensation Payment).
[71]
The Compensation Payment, less any required deduction in taxation, is to be made within 21 days of this decision. An order to that effect is separately published.”
Ismaeli v Seaway HCO Pty Ltd [2026] FWC 601 delivered 24 June 2026 per Cross DP