'Disgruntled partner' or 'employee seeking to damage the business'? FWC decides
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who claimed she was wrongfully terminated by her former partner when their romance broke down.
The parties were in a personal relationship for around six-and-a-half years, living together with their respective families.
They also worked together in a live-streaming business, which the employer initially operated as a sole trader before incorporating in September 2021. The worker was employed as an apprentice and also held the position of company secretary.
The FWC found that the personal and professional relationships between the worker and her employer overlapped significantly, with the boundaries between business and personal expenditure being unclear.
The worker's wage rate was set to cover the rent payments for the home she shared with her employer, leaving her dependent on payments from her employer's personal account or her side business to support herself and her family.
Allegations of misconduct and dismissal
In August 2023, the worker and her employer's personal relationship broke down, leading to significant hostility between them.
The employer issued a letter to the worker, alleging that she had made 12 unauthorized transactions from the company's bank accounts and had attempted to prevent him from operating the business by changing the password for its email account.
The worker declined to attend a meeting to discuss the allegations, and the employer subsequently sent her a termination letter on September 2, 2023.
The FWC found that there was a significant degree of informality in the operation of the business due to the overlapping personal and professional relationships.
‘Disgruntled partner’ in business breakup
The FWC accepted the worker's evidence that the transactions identified by her employer prior to the breakdown of their personal relationship could be explained by the considerable overlap between office work and their romance.
It determined that the worker's actions around the time of their hostility were part of the deteriorating personal relationship rather than deliberate misconduct as an employee. The FWC found that the worker was “acting as a disgruntled partner, rather than an employee seeking to damage the business.”
Regarding the allegation that the worker had attempted to lock her employer out of the company's email account, the worker provided evidence that she had always had full access to the account.
She claimed that when she logged in, she was prompted to reset the password to gain access and followed the prompts. The worker stated that she was unsure why her employer alleged she had attempted to lock him out of the account, as she was working on a fundraiser for the business at that time.
Employer ‘condoned’ prior acts
The FWC found that the worker's conduct in processing 12 transactions from the employer's bank accounts for personal purposes did not constitute misconduct in the employment relationship.
It said that the conduct was effectively condoned by the employer prior to the breakdown of the close personal relationship between the worker and her employer.
However, the employer attempted to take a different approach to the expenditure after becoming hostile without putting the worker on notice that this would occur.
The FWC stated, "While past condoning of conduct is not automatically determinative of whether similar conduct later constitutes a valid reason for dismissal, it is a relevant consideration."
Was it unfair dismissal?
The Commission also found that the worker's actions after the relationship broke down primarily occurred as part of a broader family law dispute rather than within the employment relationship.
Although the FWC found that the worker deliberately changed the password to the employer's email account on August 17, 2023, it determined that this step was taken primarily against her employer in his personal capacity rather than being directed against the company as a corporation.
The FWC was not satisfied that the worker was attempting to cause damage to the company when she took this step. Thus, it said that the worker was unfairly dismissed. It then ordered the employer to pay compensation.
