Manager achieved only 47.7% of the reduced target, but never warned that the job was at risk
A sales manager challenged his dismissal, arguing he was never warned his job was at risk despite sustained poor sales performance and was not given the opportunity to respond before termination.
The worker contended his sales targets were unreasonable, sales were incorrectly allocated to others, drought conditions impacted regional customers, and limited warehouse stock caused delivery delays affecting sales.
The employer maintained that the worker's sales performance was significantly below target at only 47.7% over eleven months, compared unfavorably to other sales managers achieving 90-100% under the same conditions, and poor performance contributed to the Victorian operation's significant financial loss.
Employment and sales targets
The worker commenced employment with the employer on 28 February 2024 in the position of independent sales manager for regional Victoria and Tasmania.
His contract of employment provided for a base salary of $110,000, standard superannuation, a mobile phone, a laptop, use of a full-maintained vehicle for business and limited personal use and a potential sales bonus subject to achieving specified sales targets.
The worker's contract of employment included an annual sales target of $4 million, the attainment of which would entitle the worker to a bonus of $25,000.
The employer's director stated that, as the worker started late in the 2023/2024 financial year, a reduced budget of $732,000 was set for the March to June 2024 period, against which he stated the worker only achieved 64.8%.
The worker stated that the sales target for the 2024/2025 period was adjusted down to $2.8 million, against which he said he initially performed well, achieving 188.32% of the target in the Spring sales period.
In the Autumn sales period, the worker's performance fell to 35.2% of the target, although he noted that only one of his colleagues exceeded 60% in that period.
When questioned on his performance in the Spring sales period, the worker confirmed that the sales attributed to the Spring sales was a subset of his overall quarterly sales performance and reflected a particular sales campaign to clear certain stock.
He further accepted that his overall quarterly sales performance in that quarter was well below target.
Performance meetings and support measures
The worker stated that initially he had fortnightly sales meetings with his senior business manager and the director, but the frequency of these meetings later changed to monthly meetings.
He said that from October 2024, the director stopped attending the meetings, but the worker continued to meet regularly with the senior business manager until the manager's resignation in April 2025.
The worker said that from this point, he no longer had regular performance meetings and only met with the manager's replacement occasionally.
The worker recalled on one occasion being told by the replacement during a meeting that he was a valued team member, knew what he was doing and that the sales budget was going to be reduced by $800,000 to $2 million.
The worker's sales target of $2.8 million for the 2024/2025 financial year represented a 30% reduction on the worker's initial target of $4 million.
The director stated that the reduction reflected broader economic conditions and lower consumer demand and was intended to give the worker a fairer chance of success.
The director also stated the worker achieved $1.3 million in sales in the period from July 2024 to May 2025, being only 47.7% of the reduced target.
According to the director, the worker's sales were insufficient to justify a full-time sales manager and compared unfavorably to the results of sales managers in other states who achieved between 90% and 100% under the same market conditions and with the same support from business management.
To emphasize the financial position of the employer's Victorian business, the director provided a summary of the Victorian operation's financial performance for the 2024/2025.
The profit and loss summary revealed a loss for the year of $384,418 on revenue of $11,981,834.
Comparative performance data
Monthly performance reports provided in respect of other sales managers and sales agents across Australia showed a spread of sales performance ranging from 76.4% to 109.4% of targets.
The two other Victorian sales agents achieved full-year figures of 76.7% and 109.6% respectively.
The director confirmed that the sales targets set for sales agents differed across the business, reflecting the varying mix of metropolitan, regional, large chain stores and independent stores.
A review of the monthly sales figure reports revealed that the worker's target for 2024/2025 was initially set at $2.8 million, while the targets for the two other Victorian sales staff were respectively $6.5 million and $6 million.
By further comparison, one interstate sales agent had an annual sales target of $15 million, against which he achieved 92.2%.
It is noted that the sales figures for the worker for 2024/2025 do not include the full financial year, given that he was dismissed on 23 May 2025.
Exclusion of the May and June sales and targets from the worker's sales figures results in a progressive year-to-date performance of $1,264,975 sales against the progressive target of $2,268,000.
This represents 55.7% against the target. By comparison, his Victorian colleagues had at the same point of the financial year achieved progressive sales figures of 76% and 112%.
The director stated he wrote to the senior business manager as early as October 2024, expressing concern that the worker had only achieved 58% of his first quarter sales target for 2024/2025.
Shortly after this exchange, the manager raised the sales performance issue with the worker in an email dated 12 December 2024.
The director further stated that the employer assisted the worker through a range of measures, including national campaigns counted towards the worker's budget, special pricing and targeted promotions to boost sales, strategy meetings to set daily targets, sales plans and customer approaches, marketing support and promotional materials, showroom events, and regular meetings.
Worker's explanations for poor performance
Meeting notes of monthly sales meetings were regularly distributed to the worker and another colleague.
The worker was also provided with an individual monthly sales figures report for the year to date. The reports in evidence revealed that the worker was consistently and significantly below his sales target for the 2024/2025 financial year and, as of May 2025, had only achieved 47.4% year to date.
The worker agreed in cross-examination that the sample monthly reports provided by the employer were typical of the reports produced. The worker further agreed that he received the monthly sales figure reports and that his sales were well below his target.
He stated, however, that he was never warned verbally or in writing that his job would be at risk if he did not meet his sales targets.
The worker also described daily emails he sent to the director, senior business manager, and the replacement manager after he replaced the senior business manager.
He said he included in these emails details of customers he had met with that day, any relevant comments they made, issues raised, and the value of the product sold.
He further stated that the daily reports revealed the amount of effort and frequency of contact he made with customers. He said he also included updates on any factors that may be impacting sales.
He confirmed that he never received a reply to his daily reports or a warning regarding his sales performance.
The worker attributed his poor sales performance figures to a number of factors including: sales and orders he made were often not assigned to him and so were not tracked against his targets; the drought in regional Victoria since 2023 impacted on regional customer demand for furniture; the replacement manager established and maintained direct contact and relationships with customers in the worker's areas of responsibility; and limited stock was held in the warehouse which resulted in longer product delivery timeframes compared to competitors, which adversely impacted sales.
Director's response to explanations
The director was cross-examined on the reasons put forward by the worker for his poor sales performance and variously responded:
He accepted that if the worker's sales were attributed to another sales agent, it would negatively impact the worker's sales figure, although he was not aware of this ever happening.
The example referred to by the worker was only to the value of approximately $5,000, which represented a small percentage of the worker's annual sales target of $2.8 million.
He did not accept that the drought conditions in western Victoria impacted to the extent contended by the worker.
He referred to the sales figures for chain stores in western Victoria which he said did not reveal a sales drop comparable to that experienced by the worker, who only serviced independent stores in western Victoria and not chain stores.
The director initially claimed that the worker had never raised the issue of the western Victorian drought affecting his sales performance but conceded that the worker did raise the problem in a comment in his 6 May 2025 daily report.
The worker recorded in that report that he had received feedback from one store that 'Farmers buying grain and water for their cattle'.
The director accepted that the inference to be drawn from that comment was that graziers were spending money on grain and water because of drought conditions in western Victoria.
The director also pointed to the sales figures of the two other Victorian sales agents who also serviced regional Victoria and had not experienced the same magnitude of sales shortfall against their sales targets that the worker suffered.
He conceded, however, that he was unsure of the proportion of those agents' sales that were derived from western Victorian stores.
The director rejected that the Victorian warehouse held limited stock, such that it adversely impacted sales.
He conceded that all other things being equal, a delay in delivery could affect sales, but maintained that a one to two week delivery time experienced in Victoria was standard in the industry, meaning that the issue of stock delivery delays raised by the worker was, in his opinion, only a small factor.
Misconduct allegations rejected
The director also claimed that the worker engaged in misconduct. This, he stated, occurred when the worker did not follow the special pricing offer and offered lower prices to customers.
This was drawn to the worker's attention in an email on 27 March 2025. The director referred to a further instance of claimed misconduct where the worker produced duplicate call records on two consecutive days, which the director suggested was an indication that the worker was fabricating his call records.
When questioned on the two incidents of alleged misconduct, the director agreed that after the pricing issue was drawn to the worker's attention, there was no repeat of that behaviour.
The director also conceded that the matters raised by him were not considered sufficiently serious at the time to warrant any kind of warning and did not constitute misconduct.
In response to the director's claims of misconduct, the worker responded that he had negotiated a lower price but that he confirmed this price with the replacement manager before finalizing the sale.
He further stated that all orders required approval from either the senior business manager, replacement manager, or an internal processor in Sydney, who would provide a second check and would not process an order if the price was incorrect.
As regards the claim of duplicate call records, the worker denied fabricating the records.
He stated the duplication was a mistake and the issue was addressed with the director the following day, and was never raised by the director again prior to these proceedings.
Termination without warning
The worker stated that on 23 May 2025, he received a phone call from the replacement manager around 2 to 2:30 pm asking him if he could meet with him by phone at 3:00 pm that day.
The reason for the meeting was not disclosed to the worker at that stage. The worker said he assumed it was a sales performance meeting as he had not had a sales meeting for a while and had not spoken with either the replacement manager or director for about two weeks.
The replacement manager called the worker at approximately 3 pm and was accompanied by the head of logistics.
According to the worker, the replacement manager said words to the effect that "due to failure to meet your budget targets, you're hereby terminated. We will pay you the remainder of the week, your four weeks, plus whatever is owed." The worker stated he did not reply as he was shocked.
Later that day, on 23 May 2025, the replacement manager sent an email and text message to the worker confirming that, due to sales budgets not being met, the employer was unable to continue his employment.
The worker's position would be terminated effective 23 May 2025. He would receive payment in lieu of a four-week notice period.
The director agreed during cross-examination that he had not directly warned the worker at any time during his employment that his employment was at risk, nor was he aware that any other staff member had done so.
Nor could he identify any written document that warned the worker that his employment was at risk because of his sustained poor sales.
Post-dismissal circumstances
The worker stated that he had been unemployed since dismissal, applied for Centrelink benefits and received his first payment on 1 September 2025.
He further stated that he had been unable to get a new job in furniture sales because of the post-employment restraints in his employment contract that prevent him from undertaking work in competition with the employer or from soliciting business from any of the employer's clients anywhere in Australia for up to 12 months.
He also said that he had tried looking for other sales roles, but the nature of the employment contract, with a post-employment restraint clause, limits the possibility of working in furniture sales, which was his only experience over the last 20 years.
The worker also submitted that at age 66, he needed to be realistic about his employment prospects and was exploring opportunities outside of furniture sales work.
He said he had planned to continue working for the employer until his retirement at 70, but did not wish to be reinstated in the event he was successful with this application. That was because of the distasteful manner of his dismissal and his loss of trust in the director and replacement manager.
Valid reason found but procedural failures
The Commissioner found the worker's dismissal was supported by a valid reason. The worker accepted the initial sales target of $4 million when he signed his contract of employment, and there was no evidence that he objected to or challenged the revised sales target of $2.8 million.
The Commissioner found that, contrary to the worker's claim that his sales were routinely allocated to other sales staff, there was insufficient evidence to establish this routinely and negatively impacted the worker.
The Commissioner was not satisfied that the effects of the drought in western Victoria could explain the gravity of the worker's sales shortfall.
He rejected the worker's claim that the replacement manager undermined his sales, noting the manager only commenced in April 2025 and the worker was terminated on 23 May 2025.
The Commissioner found the shortfall in the worker's sales against his target was so significant as to establish a valid reason for his dismissal.
This weighed in favor of a finding that the dismissal was not unfair. However, while the worker was regularly updated on his sales performance, he was at no stage advised that the employer was considering the termination of his employment because of that sales performance.
The Commissioner was consequently not satisfied that the worker was notified of the valid reason for his dismissal prior to the decision being made. This weighed in favor of a finding that the dismissal was unfair.
The worker was not provided with an opportunity to respond to the reason for his dismissal prior to that decision being communicated. He was simply notified of the decision to dismiss and was not given an opportunity to explain the reasons for his weak sales performance or why he should not be rejected.
This denied the worker an opportunity to try to persuade the employer that his dismissal should not proceed. This weighed in favor of a finding that the worker's dismissal was unfair. The dismissal was related to unsatisfactory performance.
There was no evidence that the worker was formally warned or put on notice that his employment was at risk due to his poor sales performance against budget.
The Commissioner was not satisfied that the worker received any warning regarding his unsatisfactory performance. This weighed in favor of a finding that the dismissal was unfair.
Compensation of twelve weeks pay ordered
The Commissioner found the worker's dismissal was supported by a valid reason, which weighed in favor of a finding that the dismissal was not unfair. However, there were significant procedural failures of the employer in carrying out the dismissal.
Those failures were such that the worker was denied an opportunity to explain his performance or seek to persuade the employer that dismissal was not appropriate.
Those procedural failures, along with the poor employment prospects of the worker due to his age and post-employment restraints, were of such significance as to displace the weight the Commissioner accorded to the valid reason.
The Commissioner was satisfied that the dismissal was unjust because of the procedural failures and harsh because of its consequences. The dismissal was consequently unfair.
The worker did not seek reinstatement in circumstances where he had lost trust in the director and replacement manager as managers.
Having regard to the worker's views, the Commissioner considered that reinstatement was inappropriate. The Commissioner found the worker was unfairly dismissed and noted the worker remained unemployed.
The Commissioner considered that an order for payment of compensation was appropriate. The worker commenced employment on 28 February 2024 and was terminated on 23 May 2025, a period of only 15 months. The Commissioner considered the worker's short length of service did not favor an adjustment to the compensation otherwise calculated.
The Commissioner found that had the worker been warned and afforded an opportunity to address his deficient sales performance a reasonable period in which to demonstrate improvement would have been twelve weeks.
The Commissioner was not confident he could have arrested the sustained decline in his sales performance.
The Commissioner did not accept the worker's speculation that it was likely he would have turned his performance around, given the downward trajectory of his sales over the six months prior to his dismissal.
The Commissioner found it was unlikely that the worker would have remained employed beyond a further period of twelve weeks.
The worker's weekly earnings prior to his dismissal were $2,115 excluding superannuation, meaning that his anticipated earnings for the twelve-week period were $25,380.
The Commissioner was satisfied the worker had taken reasonable steps to mitigate his losses. The Commissioner accepted that the worker did not receive income in the twelve-week period following his dismissal.
The Commissioner was satisfied the worker was unlikely to earn income in the period between making the order and payment. The Commissioner found that no deduction for contingencies was appropriate.
The Commissioner ordered the employer to pay $25,380 gross, less taxation as required by law, to the worker in lieu of reinstatement within 14 days.
