Tensions with the CEO? Smoking break dispute escalates to unfair dismissal claim

Recent FWC decision examines workplace conduct and termination procedures

Tensions with the CEO? Smoking break dispute escalates to unfair dismissal claim

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case where a worker claimed she was suddenly dismissed after raising concerns about her employer's conduct during her lunch break.

On July 1, 2024, during her first day at a newly relocated workplace, the worker argued that her employer directed her to leave and not return after she questioned his treatment of her during a dispute about her conduct during a break. She said the dismissal was sudden and unfair.

The employer, Scuderia Eastern Suburbs Pty Ltd trading as Eastern Suburbs Automotive, denied dismissing the worker, arguing instead that she left voluntarily following what they described as a minor disagreement.

The employer objected to the unfair dismissal application on jurisdictional grounds, asserting there was no formal termination.

Background of the case

The dispute occurred at an automotive workshop that had just relocated from Botany to Woolloomooloo. The business employed six staff members and provided services such as diagnostics, brake repairs, suspension work, and logbook servicing.

While small in direct employment, it was part of a larger organisation owned by the chief executive officer (CEO) who operated approximately 21 branches.

The worker had been employed as a part-time receptionist since June 2022, typically supervised by the service manager. The service manager was responsible for day-to-day operations, including handling employment issues at the workshop.

On the first day at the new location, the worker arrived at 7:45am for her 8:00am start. Around 12:30pm, while on her lunch break and smoking outside, the CEO approached in a workshop car.

Evidence presented showed he beeped his horn, imitated her smoking, and said she shouldn't smoke outside.

Workplace conduct leads to termination

The worker sought guidance from her service manager after becoming distressed by the interaction. In evidence later presented to the Commission, the service manager stated:

"Very pleasant person, a kind person, I never had any issues on a personal level with her at all. She did the job pretty well. There were no issues on a professional level either. She always did what was asked of her."

The CEO provided a different account, stating in evidence: "At the end of the night I reached out to [the worker] with a text message. We all make mistakes. It could have been that she was having a bad day. I was having a bad day. We get on with it."

Text messages presented as evidence showed the service manager writing to the worker: "I'm really sorry that it all happened like that. If you need anything from me please let me know. [Of] course, I will give you a glowing reference if you apply for something else."

Is there a valid reason for dismissal?

The Commission found in its determination: "[The worker] was dismissed after reasonably raising concerns about [the CEO’s] conduct towards her and that this was not a valid reason for the dismissal."

Looking at potential remedies, the Commission stated: "The negative attitude of [the CEO] towards [the worker] combined with [the worker's] reluctance to return to the workplace leads me to conclude that reinstatement is inappropriate."

The Commission's final determination emphasised: "I have accepted that the dismissal has had adverse consequences for [the worker] including distress and financial hardship. Based upon these findings, I have concluded that the dismissal was harsh, unjust and unreasonable."

At the time of the hearing, the worker was receiving workers' compensation payments at a reduced rate compared to her previous salary.

The Commission requested additional information from both parties to determine appropriate compensation, as the worker had received no notice payment and no income for three weeks following the dismissal before workers' compensation payments began.