The benefit sat outside the enterprise agreement - the Commission still called it binding
Cutting costs is one thing. Cutting a benefit your worker was promised in writing is another - and it can cost you an unfair dismissal claim.
A Western Australian drill-and-blast contractor learned that on July 29, 2026, when the Fair Work Commission found it had effectively dismissed a drill fitter by scrapping the interstate flights it had long paid for.
The company had been under real financial strain. Two long-term projects closed early, and it stayed afloat by selling equipment and reducing its workforce. To win a new contract, it told the worker it had to cut its hourly rates by up to $9. So on December 15, 2025, it wrote to him withdrawing two things: the arrangement to pay for his flights between his interstate home and the job site, and a KPI/safety bonus. Both, the company said, sat outside its enterprise agreement and outside the new tender's costings.
The worker resigned that same day, giving five weeks' notice. He said his resignation was not voluntary and was a direct result of the company's unilateral removal of his company-paid interstate flights and the resulting drop in his overall pay. He estimated the flights alone were worth about $20,000 a year.
The company's operations manager gave evidence that the worker could have approached him to discuss the change, or salary-sacrificed the flights himself. The Commission was not persuaded. The December letter, it found, was unequivocal - it presented the withdrawal as settled, not as a proposal open to negotiation. Nor, it found, was salary-sacrificing a real substitute, since the worker would still have had to pay for flights the company had previously provided.
The decisive point was the flights. That arrangement had been set up in a separate letter in August 2018, alongside the employment contract. The employer treated it as a discretionary perk. The Commission disagreed, finding it was an enforceable contractual benefit - a promise that had helped induce the worker to take the job - and that its absence from the enterprise agreement did not make it optional.
Removing it repudiated the contract, the Commission held. Once the employer signalled it no longer considered itself bound, the worker was entitled to treat the employment as at an end. Under section 386 of the Fair Work Act, his resignation amounted to a dismissal at the employer's initiative. The Commission dealt with the flights alone on this point and did not need to decide whether removing the bonus would also have been a repudiation.
The unfair dismissal finding followed. There was no valid reason connected to the worker's capacity or conduct, no consultation and no discussion before the change. The Commission noted the employer could have revisited its decision when the resignation arrived, while the worker was still serving notice, but did not.
The company's financial position did not shield it on liability, but it shaped the remedy sharply. Because the new tender genuinely excluded flight and bonus costs, the Commission found the worker would likely have remained only about three more weeks. Reinstatement was inappropriate, partly because he had already secured a new fitter role that included flights. It ordered $7,074.38 gross plus $848.93 in superannuation.
For HR and industrial relations teams, the message is direct. A benefit need not sit inside an enterprise agreement to bind an employer. A side letter or a long-honoured arrangement can form part of what an employee agreed to - and pulling it unilaterally can amount to a repudiation. Announcing a cut as final, rather than consulting on it as a proposal, is what turned a cost-saving decision into a dismissal here.
