Manager sent all employees home because he wasn't sure he could pay wages
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application from an installation manager who alleged he had been unfairly dismissed from his employment with an energy company.
The worker commenced employment on 22 January 2024 and lodged an application on 26 April 2025 for a remedy, alleging unfair dismissal. A threshold issue to determine in the matter was whether the worker had been dismissed from his employment.
The worker claimed that at a company meeting in April 2025, the manager advised employees that the company was going into administration and that all employees had to find new jobs.
The manager explained that the company had a significant amount of outstanding customer debt, and he informed employees that he was uncertain about paying wages that week.
The manager said he thought it was unfair to require employees to work if he was unsure whether they would be paid.
Company meeting and financial difficulties
On 7 April 2025, the worker approached the manager to inform him that he had put an offer on a house to purchase and wanted to confirm that he had job stability before he paid a deposit.
The manager informed the worker that he was worried that the company was "going under" and that he had spent the past six weeks sleeping on the office floor.
The manager requested that the worker give him a day to work everything out and asked the worker to keep this information to himself.
Later that day, the manager told the worker to call all the customers and cancel their jobs and that he would be having a meeting with all employees the following morning.
On 8 April 2025 at 6:30 am, the manager called a company meeting. The worker claimed that at the meeting, the manager advised employees that the company was going into administration and that all employees had to find new jobs.
The worker said the manager sent all employees home and advised them that an administrator would be in contact with them.
The worker said that for the rest of the day, he waited for a call from the administrator but never received one.
The manager's version of this meeting was that the company owed a lot of money by customers, and he advised the worker and the rest of the team that he was not sure if he was able to pay the wages that week.
The manager explained to the Commission that he thought that it was unfair for the company to require employees to work if the manager was not sure if they would be paid.
The Commissioner asked the manager what he thought would happen when he sent his employees home.
The manager said that at that stage, he was not sure what would happen, so he told employees to wait for a phone call the following day, either from the manager or from some advisers that he was getting advice from at the time.
The manager said that his advisors were administrators, but that the company was not in administration. The manager denied that he informed employees that the company was going into administration.
Worker secured alternative employment
The worker said that as he did not hear anything on 9 April 2025, he began making arrangements for a new job and ultimately secured a job and signed a contract with a previous employer.
On 10 April 2025, the manager called a number of staff, including the worker and invited them to return to work.
The manager said that this was the day that the paychecks were usually processed. The manager said that he told the worker that he had sorted everything out, that the worker could come back to work and that he was able to pay him.
The manager said the company had to cut operational costs, and part of those costs were wages.
The worker said that he did not return to the company as he signed a contract with a different employer. The worker explained that he required stable employment because he was in the process of purchasing a house.
The worker said that he had lost a lot of trust in the manager because of the manager's actions.
Later that day, the worker returned the work vehicle to the company. He saw the manager in the office, who advised the worker that he had found some investors.
The worker produced a number of text messages between the manager and himself. On Wednesday, 9 April at 10:12 am, the worker messaged expressing hope and offering to chat if needed.
On Thursday, 10 April at 7:57 am, the worker asked when the administrators would be reaching out and when he needed to return the vehicle.
On Friday, 11 April at 8:01 am, the manager asked if the worker was able to drop the vehicle off that day.
On Friday, 11 April at 4:25 pm, the worker asked about leftover pay and holidays. The manager replied: "Cheers. I will get it sorted in the next week or so and get it up to date for you."
Outstanding entitlements remained unpaid
Despite the manager's commitment to sort out the worker's pay and holidays "in the next week or so", this did not occur, although the worker sent multiple text messages which the manager did not respond to.
The worker said that on 17 April 2025, he became aware that all employees who returned to the company received outstanding pay for the period from 31 March 2025 to 11 April 2025.
The worker called the manager asking for his wages, and the manager said that he would receive payment that week. This did not occur.
By the time of the hearing on 22 July 2025, the worker had received outstanding wages for the period, many weeks after they were due, but had not received 19.548 hours of annual leave and 16.6 hours in relation to rostered days off.
At the hearing, the manager said that the worker had accepted employment with a competitor, which was prohibited by his contract of employment. The manager also claimed that the worker was required to provide a notice period when he resigned, and work during this notice period, which he did not do.
The manager said that he was advised that he was entitled to deduct this notice period from the worker's annual leave.
It was clear during both the initial case management conference and the hearing that the worker's primary motivation in pursuing the unfair dismissal claim was to recoup his outstanding entitlements.
The Commissioner explained to the parties that the Commission does not have the power to order an employer to pay outstanding wages and leave in response to an unfair dismissal application.
The Commissioner also explained that although the Commission has the power to order compensation as a remedy in an unfair dismissal claim, this may not be available in the worker's case as he had advised the Commission that he experienced no financial loss with respect to wages between the time he ceased employment and commenced employment with a new employer the following working day.
Whether worker was dismissed examined
The FWC examined whether the worker had been dismissed from his employment. Section 386 of the Fair Work Act provides that a person has been dismissed if the person's employment with his or her employer has been terminated on the employer's initiative, or the person has resigned from his or her employment but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
The expression "terminated on the employer's initiative" is well understood to be a reference to a termination that is brought about by an employer, and which is not agreed to by the employee.
The evidence established that on 8 April 2025, the manager sent home all employees of the company because the company was experiencing financial difficulty, and he was not sure if he would be able to pay employees when their next pay was due on 10 April 2025.
There was a dispute about whether the manager advised the employees that the company was under administration.
However, the worker did not allege that the manager advised employees that their employment was terminated.
In fact, the worker stated in the application that the manager did not confirm his verbal advice on 8 April 2025 in writing, "nor did he officially sign off that we were required to find new jobs or that our employment was redundant".
The Commissioner accepted that when the worker was sent home, it was likely that he was uncertain about whether he still had a job with the company.
The Commissioner accepted the worker's evidence that the manager told employees on 8 April 2025 that they had to find new jobs.
The Commissioner stated: "It is understandable that [the worker] acted decisively the following day by looking for alternative employment when he had not heard from [the manager] or his advisors."
Given that the worker was messaging the manager at 7:57 am on 10 April 2025 about returning the vehicle, it was likely that he secured alternative employment by that time and that this occurred before the manager advised the worker that he still had a job at the company.
Employment terminated at worker's initiative
The Commissioner stated: "While [the manager's] advice to employees that they had to find new jobs indicates that [the company] may have been initiating the termination of [the worker's] employment, I do not believe that this occurred when all of the other circumstances are considered."
The timeframe between the worker being sent home and then being advised by the manager that he still had a job at the company was only two days.
The worker was paid up to date, and his next pay was due on 10 April 2025, the day that the manager confirmed that the worker was still employed. Taking into account all of these matters, the Commissioner found that the worker was not dismissed by the company.
The Commissioner also found that the employment relationship was terminated at the worker's initiative when he obtained alternative employment.
The Commissioner stated: "My finding about this matter may have been different if: a longer period had elapsed between [the worker] being sent home and being advised that he still had a job at [the company]; and [the worker] was not paid up to date at the time that [the manager] confirmed that [the worker] was still employed."
As the Commissioner found that the worker was not dismissed, the Commission did not have jurisdiction to hear the application, and it must be dismissed.
However, the Commissioner believed it was important to make a number of observations in relation to the outstanding payments owed to the worker by the company for the benefit of the manager.
The messages exchanged between the worker and the manager during the period from 9 to 11 April 2025 showed that the worker was compassionate about the manager's financial circumstances and was cooperative in relation to returning the vehicle and providing the password to his computer.
At no time during that exchange did the manager advise the worker that he was required to work during his notice period or that he was in breach of his contract of employment.
Observations about outstanding entitlements
The Commissioner stated: "These claims appear to be recent inventions by [the manager] designed to avoid fulfilling the legal obligations of [the company] with respect to outstanding entitlements owed to [the worker]."
The manager may have believed that he was acting appropriately when he sent employees home on 8 April 2025, but this did not change the likely adverse impacts that the financial circumstances of the company had on employees, through no fault of their own.
In the worker's case, he said he lost the opportunity to proceed with the purchase of a house because the manager's advice caused him concerns about his job security and financial stability.
The Commissioner stated: "Against this background, [the worker's] decision to find alternative employment appears to be a reasonable response so it is difficult to understand why [the manager], having put his employees in a situation where their job security was threatened, required [the worker] to work out a notice period and complained about [the worker] working for a competitor."
In any event, the text messages between the manager and the worker, including the manager's request that the vehicle be returned on 10 April 2025, suggested that the manager wanted the employment relationship to cease immediately and that the manager waived the notice period.
Regardless of the worker's contractual obligations towards the company, the company was obliged by section 90(2) of the Fair Work Act to pay the worker for his untaken leave when the worker's employment ended.
The Commissioner noted that the issue of unpaid annual leave was recently the subject of a decision by Justice Raper in the Federal Court.
That case dealt with an employer who delayed paying an employee's outstanding annual leave entitlement for a period of three months.
Justice Raper found that the delay in payment of annual leave was in breach of section 90(2) of the Act and awarded the employee $10,000 general damages. In the penalty decision, Justice Raper found that it was appropriate for the Court to impose a pecuniary penalty of $17,000 for the late payment of annual leave on the employer, payable to the employee.
The Commissioner stated: "Given that [the manager] has relied upon advice to withhold [the worker's] entitlements, and that this remains a live dispute between the parties which was ventilated in the proceedings before me, I believe that it is appropriate to suggest that [the manager] revisit his position with his advisors."
As the Commissioner found that the worker was not dismissed, the Commission did not have jurisdiction to hear the application.
The application was dismissed. Nevertheless, the parties were encouraged to resolve the outstanding issues between them.
