FWC decision a cautionary tale about boundaries between personal, professional relationships
The Fair Work Commission (FWC) recently dealt with a case involving two "best mates" turned workmates turned rivalries in courts due to an unfair dismissal case application.
Initially, the workers were getting along fine in the workplace. However, a misunderstanding of workplace arrangements involving commissions and abrupt dismissal ultimately broke down the workers' “best mate” relationship.
'Hand-shake deal'
According to the FWC's decision, the "best mates'' were initially the only two employees of a tile company. One was the general manager, while the other performed warehouse duties.
Given their close-knit relationship, there was no written employment contract between the two workers, as the worker tasked with the warehouse duties offered to work with his friend to build up the wholesale side of the business. The agreement was mainly based on a "hand-shake deal."
Nonetheless, a commission arrangement was agreed upon between the two parties so that no commission would be payable for the first six months of the worker being tasked with warehouse roles.
Later, the worker asked his friend's manager about the commission he believed he was owed. However, the manager dismissed his friend's queries with a lengthy text message: "The sales are not good enough, and your position is losing money, every month. So unfortunately, the company cannot keep you employed anymore."
In the letter of termination sent to the worker, the "reason of redundancy" was the ground for his employment dismissal, stating the employer’s decision did not reflect his performance. Thus, the dismissed worker applied for an unfair dismissal remedy.
FWC's decision
Ultimately, the FWC found a valid reason for the worker's dismissal: the company no longer needed his role.
Nonetheless, while there was a valid reason for the worker's dismissal from his employment, the Commission found that removal was unreasonable due to a lack of procedural fairness.
The Commission also noted that aside from the size of the company, which had no human resources or other specialists to aid in the proper process of the worker's dismissal, reasons for no procedural fairness concerning the dismissal were mainly because the relationship between the two former best mates was more personal than professional.
It also found that the dismissal was not a case of genuine redundancy as it would have been reasonable to redeploy the worker within the tile company as a warehouse worker.
However, despite the unreasonable dismissal, the Commission sought a compensation remedy for the worker rather than reinstatement in the workplace, as the relationship between the former "best mates" had already been tainted.
