She was never paid, then fired the day she asked - and the company was empty
A court has ordered a company director to personally pay nearly $34,000 after his business never paid a newly hired executive and dismissed her the day she asked for her wages.
In a decision handed down on August 10, 2026, the Federal Circuit and Family Court of Australia found a small bathroom renovation company breached the Fair Work Act in five separate ways. It then held the company's sole director personally liable for all of them.
The worker was hired as chief operations officer and started on March 1, 2025. A French citizen on a working holiday visa, she had told the director before accepting that she wanted a long-term role and visa sponsorship. Her contract set a base salary of $110,000, paid monthly.
She was never paid. When she began chasing her salary in early April, the director gave a series of reassurances that the court found were false. On one occasion he sent her a screenshot of a bank message that appeared to confirm a $3,500 transfer. The court found the transaction had been falsified. The director later admitted he had lied because he did not have the money at the time.
On April 11, the worker raised her unpaid wages with him again at the office. The court found he became angry, told her to leave, and sent a termination message within the hour - a message he confirmed he had produced using ChatGPT.
The court found the company failed to pay wages, failed to pay accrued annual leave and pay in lieu of notice, dismissed the worker because she tried to enforce her right to be paid, and knowingly made false representations about her pay. These were breaches of sections 323, 90, 117, 340 and 345 of the Fair Work Act.
For HR professionals, the striking part is who ended up paying. The worker chose not to sue the company. She pursued the director in his own name, and succeeded. The court relied on section 550 of the Act, which extends liability to a person who is knowingly involved in a breach. It found the director was "the directing mind and will of the employer company" and had knowledge of, and was directly involved in, each contravention. Under the order, he was "deemed to have made those contraventions personally."
His defences did not hold up. He said he could not read or write, said he had ADHD, and suggested he had not known what the contract contained. The court noted he produced no medical evidence and preferred the worker's account throughout, describing him at the hearing as "evasive" and "bombastic," and noting he had "admitted he had lied to the applicant when she had pressed for payment."
The contract itself drew comment from the bench. Both sides had drafted it with help from ChatGPT. The judge found it poorly written, called some clauses "nonsensical," and said it "should offer a cautionary note to any small business making uncritical use of AI-drafted documents."
The worker did not succeed on every claim. She had sought compensation for lost income over a 13-week period of unemployment after the dismissal. The court declined, finding her difficulty getting new work came from her looming visa expiry rather than the sacking. It also refused separate damages for the false representations, holding that any distress was already covered by the main award.
On the numbers, the court awarded $12,692.28 in unpaid wages, $974.23 for accrued annual leave, and $2,115.38 for one week's pay in lieu of notice - not the three weeks the worker sought, because employees with under a year of service are entitled to one week under the Act. It added $15,000 for hurt and distress, pointing to the "flagrant and unapologetic" way the dismissal was carried out. With interest of $3,216.68, the total came to $33,998.60.
The decision is a plain reminder that a company structure does not always protect the individuals who run it. Where a director is the person actually making the decisions that breach the Act, the company having no money - or no longer trading - may not be enough to keep the bill off them personally.
