Worker referred to director as "Didi", a Hindi expression for "sister" used respectfully
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application from a worker who alleged she had been unfairly dismissed.
The employer was an eyebrow and eyelash salon in the inner south of Melbourne. The employer was a small business.
The worker had a degree in technology from a university in India. In late 2023, the worker visited the salon as a customer and was looking for a job.
The director was looking to employ a beautician. Ensuing discussions resulted in the worker being employed by the salon as a beautician in January 2024. According to the case, there was no written contract of employment.
Employment relationship and business sale discussions
During her employment, the worker successfully completed a Diploma of Beauty Therapy and was awarded the diploma in March 2024.
The relationship between the director and the worker was, until about early May 2025, a close and productive one. The worker referred to the director as "Didi", a Hindi expression for "sister".
During the employment, the worker was the only employee of the salon. The worker was a productive worker and tendered into evidence many positive customer reviews of her work. From about February 2024, she was also responsible for marketing and taking customer bookings.
The director lived some distance away from the salon. The director's health was affecting her ability to administer aspects of the business.
From time to time, her health was such that she did not arrange timely payment of the worker's wages.
The director would tell the worker to instead take her pay from either the business's cash receipts or have customers transfer payments directly to the worker.
The director desired to establish a similar beauty business closer to her home and was considering selling the salon. The director informed the worker of the offers and encouraged the worker to consider purchasing the company.
In early 2025, the director and the worker commenced discussions about such a purchase.
In early April 2025, discussions had advanced such that the worker was of the view that there was an understanding that she would purchase the business. As a consequence, the worker opened a business bank account.
The worker gave evidence that there was an understanding that the sale would involve the worker paying the director a monthly sum for a certain period.
During April 2025, the worker paid the director a sum of $1600, which represented a deposit.
Business sale arrangement and fund splitting
The worker gave evidence of other aspects of the understanding regarding the purchase of the salon.
This involved an arrangement whereby the takings would be divided between payment of salon costs and a split of the remaining takings between the director and the worker.
The worker's split was to be deposited in her business bank account. The worker would write these details down in a book kept in the premises.
The worker would take pictures of the book and send them to the director on WhatsApp. In anticipation of the sale being finalised, the worker would also not be in receipt of other remuneration in the nature of wages.
The director denied that she authorised the worker to pay any takings into the worker's business bank account. The Commissioner asked the director if she had ever sent a WhatsApp message to the worker telling her not to make such payments.
The director initially indicated that she believed she did. The Commissioner asked her to identify any such messages. During the hearing, she looked for those messages, but was unable to find any sent during the period of employment.
The director then insisted she spoke to the worker and told her not to make any payments to her business bank accounts. The worker denied this. The Commissioner accepted the worker's denial.
By early to mid-May 2025, both the director and the worker felt there was uncertainty regarding the purchase.
The worker was waiting for the director to provide her with some proposed written terms of the sale before she made any further payments. Matters came to a head on 12 and 13 May 2025. On 12 May 2025, the director and the worker exchanged WhatsApp messages. The director indicated that she could "reduce [her] profit" but that she needed a deposit.
The worker indicated that she was worried about the status of the sale and wanted to be secure and did not want to "trust just words".
A WhatsApp voice discussion then occurred. At the end of it, the matter was still unresolved.
The director then sent a further WhatsApp message and said she would come to the salon premises the next morning.
Dismissal conversation and events
On 13 May 2025, the director went to the salon premises together with her sister. The worker said that after the director arrived, the worker attempted to speak to her about how to manage a client complaint.
The director deflected this inquiry and then asked the worker directly whether she would pay a deposit and buy the business. The worker responded that she wanted the paper documents, and then she would buy the company.
The director was angry and said to the worker that if she didn't want to buy the salon, she could leave. The director told the worker to get her key, take her possessions, not touch the director's or the salon's possessions and to leave immediately.
The worker did as instructed, packed her possessions and obtained what she thought was the spare key, which she handed to the director and then left.
The director's account of the conversation was different. The director said that she politely told the worker that she was taking money from the clients, that the business was hers and that the worker would have to return the money taken.
The worker responded by saying that the money was hers. The director asked the worker if she wanted to work at the salon.
The worker said that she didn't want to work at the salon and would only do so if the director transferred the business and lease to her.
The director responded by saying that if she didn't want to work, she would have to transfer the money back, or she would call the police. The worker said that she wasn't going to give the money back. The worker then handed her keys in and left.
The Commissioner stated: "I prefer [the worker's] account of the conversation on 13 May 2025. [The worker] struck me as a forthright and honest witness."
The worker returned to the salon premises the next day (14 May 2025) and handed the director the correct key.
The worker also provided the director with the bank statements from her business bank account.
Somewhat surprisingly, the director asked the worker to help her with clients that day. The worker acceded to this request and did so voluntarily, evidently without payment.
The director then asked the worker to work the rest of the month. The worker indicated that she would do so if she were paid an hourly rate.
The director told the worker that she would not pay the worker because the worker owed her money. Consequently, the worker declined to work as the director requested.
Dismissal and Code compliance findings
The Commissioner examined whether the worker was dismissed.
The Commissioner stated: "I am satisfied that [the worker] was dismissed within the meaning of s 386(1)(a). [The director] told [the worker] to leave the Salon, hand in the key, take her possessions and leave immediately. Clearly, this is a termination at the employer's initiative. The dismissal was effective immediately, i.e., on 13 May 2025."
Furthermore, the Commissioner did not consider that the worker's voluntary work on 14 May 2025 changed or in any way affected the status of a dismissal effective 13 May 2025.
The Commissioner examined whether the dismissal was consistent with the Small Business Fair Dismissal Code.
The Commissioner stated: "To the extent that [the worker's] deposit of Salon takings in [the worker's] business account was a reason for an immediate dismissal constituting a summary dismissal, I do not consider that [the director], as the directing mind of the Salon, believed on reasonable grounds that [the worker's] conduct was sufficiently serious to justify immediate dismissal."
The Commissioner had found that the worker and the director had an understanding relating to the sale, an aspect of which permitted the worker to deposit part of the salon takings into the worker's business bank account. The worker kept the director apprised of such deposits.
The Commissioner examined whether there was a valid reason for the dismissal. The Commissioner stated: "I do not consider that there was any such valid reason."
To the extent that the reason for the dismissal was that the worker had deposited part of the salon takings into her business account, this did not constitute a valid reason for the dismissal.
The worker only did so as part of the understanding she had with the director regarding the sale. Those transfers were made with the knowledge and assent of the director.
Valid reason and unfair dismissal
The Commissioner stated: "I find that the real reason for the dismissal was that [the director] was frustrated that [the worker] did not unequivocally commit on 13 May 2025 to make further payments to purchase the business of the Salon absent a concluded sale agreement recording the terms. This was not a valid reason for dismissal."
The worker was not given an opportunity to respond to any reason related to her capacity or conduct. She was dismissed on 13 May 2025 at the end of a discussion related to the sale of the business.
The Commissioner noted the salon was a small business, and the director appeared to be the only person managing the business with no dedicated human resources personnel.
The Commissioner also had regard to the fact that the director was dealing with a significant medical condition at the time.
The Commissioner's assessment was that these matters impacted her judgment about how to manage her evident frustration regarding the sale of the business. These matters were ameliorating for the salon.
The Commissioner stated: "Weighing all of the relevant considerations together, I am satisfied that the dismissal was harsh, unjust or unreasonable."
The Commissioner stated: "I am satisfied that [the worker] was dismissed, that the dismissal was harsh, unjust or unreasonable, and that the dismissal was not consistent with the Code. Consequently, I am satisfied that [the worker] has been unfairly dismissed."
Reinstatement was clearly inappropriate as the worker did not seek reinstatement. She clearly felt deeply offended by the suggestion that she had been dishonest in her dealings regarding the funds of the salon.
Therefore, it was necessary to consider whether it was appropriate to order compensation. The Commissioner considered that compensation was appropriate in all of the circumstances of the case.
The Commissioner had regard to the fact that the salon was a small business and accepted the director's evidence that it was currently running at a loss.
The Commissioner considered the likely duration of the employment had the worker not been dismissed on 13 May 2025.
The Commissioner stated: "In my view, the likely duration would not have been long. Clearly, the relations between the parties had become strained by matters relating to a sale of the business."
The Commissioner considered that if the worker had not been dismissed on 13 May 2025, the employment would likely have lasted only a further eight weeks.
The Commissioner stated: "I consider compensation equivalent to six weeks' pay is appropriate, being a gross sum of $7695."
