Performance and conduct dismissals – recent cases and lessons for employers

The Fair Work Commission received a record 40,190 lodgements last financial year, with unfair dismissal applications accounting for 37 per cent of the total. These claims can be costly and time-consuming for employers.

While data shows that most cases settle at conciliation stage, where they progress to full determination at a hearing and an employee is successful, they may be reinstated to their position with backpay or awarded up to six months’ compensation. 

Several recent cases show the difficulties employers have had in defending an unfair dismissal claim in the context of a performance or conduct dismissal. The cases provide a timely reminder for employers to ensure that performance and conduct related dismissals are robust and procedurally sound to defend various types of actions available under the Fair Work Act 2009 (Cth), anti-discrimination and safety legislation. 

In Mullins v. KAB Seating Pty Ltd [2025] FWC 371, Mr Justin Stanley Mullins commenced employment with KAB Seating (KAB) in August 2022 as a company accountant. In March 2024, Mullins was provided with a letter outlining 16 allegations against him and he was suspended on full pay pending an investigation. Mullins was subsequently dismissed, with KAB stating in its termination letter that Mullins’ responses to the allegations against him were “unsatisfactory and unreasonable” and that Mullins’ conduct and performance issues amounted to “serious misconduct and/or gross negligence.” 

Mullins made an application for unfair dismissal, which was heard before Commissioner Durham in the Fair Work Commission (FWC). To determine whether Mullins’ dismissal was unfair, the Commissioner heard evidence about the allegations and Mullins’ responses, concluding as to whether each was sufficiently substantiated. 

In summary, the Commissioner’s conclusions with respect to the allegations can be grouped into three categories: 

• The first category was allegations which were not sufficiently particularised (ie. detailed), such to allow Mullins to properly respond. 

• The second category was those allegations that had already been addressed and resolved between KAB and Mullins. 

• The final category was those allegations which should have been addressed prior to the allegation letters, through an informal forum or a formal performance process. 

Follow performance management policies 

Commissioner Durham held that the allegations against Mullins were unsubstantiated and that his dismissal was harsh, unjust and unreasonable. The decision highlights a few important takeaways for employers: 

• Careful drafting of allegations – The case demonstrates the necessity for correct and accurate drafting of allegations. Many of the allegations posed against Mullins were held to be lacking particulars, meaning that Mullins could not properly respond and they could not be sufficiently substantiated. This highlights the need for allegation letters to be thoughtfully and appropriately drafted, to ensure that the relevant parties can read and respond effectively. 

• Compliance with performance management policies and processes – Further, KAB’s failure to abide by its performance management policy was a significant detriment to their case. Where employers have implemented policies that are intended to prescribe processes for the management of performance issues, it is vital that these be effectively implemented according to their content. Further, employers should consider other performance interventions, whether they be formal or informal, before proceeding directly to a letter of allegations or show cause process. 

Another case before the FWC, Wang v. Springtime Poultry Pty Ltd [2025] FWC 798, concerned an unfair dismissal claim made by an employee who was terminated for serious misconduct. The employee’s claim was rejected even though the Commission accepted that the employer’s termination process was “imperfect.” 

Mr Wang was a poultry process worker engaged by Springtime Poultry Pty Ltd and was entitled to be paid a bonus based on the number of chickens he deboned. He was required to place the tail of each chicken deboned into a crate under his worktable and, at the end of the shift, count and report the number of tails on a tally sheet. A random audit identified that Wang’s crate contained 24 fewer tails than he reported. 

Nine days after the audit identified the discrepancy, Wang was called to a meeting with Springtime’s director and two allegations were put to him, namely that he was creating disharmony amongst the team by telling others that the director was a “bad boss” and “not to listen to him,” and that he had an incorrect tail count. 

At the meeting, the employee was given an opportunity to check his over-reported tally sheet count – but he denied that his count was inaccurate (despite being warned that company policy provided a count variance in excess of five tails to account for human error but more could result in dismissal). He was subsequently summarily dismissed. 

The Commission rejected the employee’s claim, finding there was a valid reason for dismissal and that it was not harsh, unjust or unreasonable. 

Condonation of misconduct 

Notably, the Commission considered that the small size of the employer and lack of any dedicated human resources staff resulted in poor procedures in implementing the dismissal. In particular, the Commission was critical of: 

• The way Springtime had managed prior conduct issues (noting there was evidence that the employee had miscounted tails previously), stating such conduct might have warranted more formal warnings. 

• The fact that the employee had been permitted to continue working for nine days after the misconduct was identified whilst the employer conducted its investigation. The Commission stated that this constituted a “procedural flaw in the termination process” and referenced the principle of “condonation,” which is the notion that an employer may waive their right to claim that conduct amounts to serious misconduct by electing not to act immediately when they become aware that such conduct may have occurred. The Commission stated that it is well established that in circumstances where an employer believes an employee has engaged in conduct so serious it would warrant termination if proven, they should have suspended the employee (ordinarily on full pay), while that investigation was underway. 

Despite these flaws, the Commission considered that the “essential core elements” were adequately addressed in the employer’s dismissal process. 

When managing misconduct or effecting a dismissal: 

• Proactively address misconduct and issue warnings where necessary – don’t avoid managing conduct issues until they reach a point warranting dismissal. 

• Ensure employees are aware of the consequences of misconduct and are given an opportunity to respond. 

• In situations involving investigation of serious misconduct allegations that could warrant termination if proven, consider whether the employee should be stood down on full pay for the duration of the investigation – but tread carefully where there is no express right in a contract or enterprise agreement to do so. 

• An employee’s misconduct may not outweigh a flawed dismissal process where an employer has a dedicated human resources team. 

Evidence of misconduct 

The 2024 case of Dickman v. Ventia Australia Pty Ltd [2024] FWC 2914 serves as a caution to employers about the evidentiary standards required in matters of serious misconduct. Mr Dickman was terminated from his role as Manager of Ventia’s Hospitality and Catering Services at the Woomera Defence Facility after his former colleague and now competitor, Mr Parker sent an email to businesses that could reasonably be perceived as competitors of Ventia. The email stated that Parker had “met up with the Woomera H&C Manager/Relief EMOS on Saturday and got a bit of a download on how things are progressing.” The email followed with details about leadership, management, catering, and staffing by Ventia at the Woomera facility. 

An officer of Ventia came into possession of the email. After determining that Parker was likely referring to Dickman, Ventia suspended Dickman on full pay and launched an investigation into the matter. The investigation and subsequent show cause process concluded that the allegations against Dickman were substantiated and his employment with Ventia was terminated for misconduct. 

The Commission found that Ventia had not met the required standard of proof for serious misconduct. Clarifying that mere suspicion or likelihood is insufficient for serious allegations; there must be a more intensive standard of proof, such that a finding must substantiate that the conduct did occur on the balance of probabilities. 

Despite finding the investigation and show cause processes were “orderly, had reasonable time frames and were considered”, the lack of substantial evidence and reliance on assumptions and inferences in substantiating the allegations against Dickman rendered his termination harsh, unjust or unreasonable. 

Standard of proof that dismissal is appropriate 

Takeaways for employer from this case include: 

• Apply the appropriate standard of proof – The decision highlights the importance of identifying the correct standard of proof when conducting investigations into misconduct. The standard of proof required to make a finding is proof on the balance of probabilities. In some circumstances, this standard can be met where the investigator is satisfied that it is more likely than not that the alleged conduct occurred. However, where there are serious allegations of misconduct, a “proper level of satisfaction” is required that the conduct did in fact occur, commensurate with the seriousness of the alleged misconduct. 

• Satisfying the standard of proof – Even where employers follow a structured process before a termination, if allegations in an investigation leading to dismissal are substantiated based on assumptions, suspicions or indirect evidence, they may fail to meet the required threshold for a fair dismissal. That is, a reasonable suspicion or possibility will not be enough. Employers must ensure that their findings are grounded in solid, objective evidence, particularly when the allegations are serious. 

These cases demonstrate that performance and conduct processes can be fraught for employers, and that it is important to ensure that employers have a clear “valid reason” for dismissal and implement a procedurally fair process. 

Diana Diaz is a Partner, Emma Moran is a Special Counsel, Jennifer Winckworth is a Special Counsel, and Jessica Smith is a Lawyer, all at Gadens in Melbourne. A longer version of this article appears on the Gadens website at www.gadens.com.