September 2025 – Can employees be dismissed while they are on sick leave?

The Fair Work Commission has dismissed a claim of unfair dismissal brought by former café general manager, Nicholas Fletcher, against his employer, Gordon House Management Pty Ltd.

Mr Fletcher, who had worked for Gordon House and its related businesses since 2015, was dismissed in February 2025 following concerns about his performance and conduct. He argued that his dismissal was unjust and sought a remedy under the Fair Work Act.

Background to the Dispute

Fletcher was responsible for managing Gordon House’s onsite café. Issues arose in 2024 when financial reconciliations revealed significant cash discrepancies—more than $30,000 was unaccounted for across several months. While Fletcher said system failures and lack of training explained the discrepancies, the company saw the problem as evidence he could not adequately handle the financial responsibilities of his role.

A second issue related to Fletcher changing the locks on a property space, before the company had formally secured a lease. The move, though aimed at securing café use of the space, angered the property’s owners and caused them to pull out of lease negotiations.

Applicant’s Argument

The applicant claimed the dismissal was harsh for several reasons:

  • He was sacked while on sick leave, despite having provided a medical certificate, and felt his employer wrongly assumed he was avoiding scrutiny.
  • He argued there was a lack of procedural fairness, saying the termination letter was the “first and only” reference to the allegations.
  • He described a hostile work environment, alleging bullying and that his past complaints about staff misconduct were ignored.
  • He insisted he never realised his job was genuinely at risk, believing earlier discussions were normal operational meetings rather than formal warnings.

The Commission’s Findings

Commissioner Tran found that Gordon House had valid reasons for dismissal—both performance issues with financial reconciliations and conduct regarding the unauthorised lock change. While the dismissal occurring during sick leave was “unfortunate” and raised some procedural concerns, it was not enough to overturn the decision.

The Commission ruled that Fletcher had been notified of the reasons, given a chance to respond, and had been warned about his underperformance. The bullying claims were largely unsubstantiated and unrelated to the main reasons for dismissal.

The Outcome

The Commission concluded that the dismissal, while difficult, was not harsh, unjust, or unreasonable under the law. Fletcher’s application for unfair dismissal was formally dismissed, and he will not receive compensation or reinstatement.

Mechanic Wins Unfair Dismissal Case Against BMW Specialist Workshop

The Fair Work Commission has ruled in favour of long-serving mechanic Matthew Rosenthal, finding he was unfairly dismissed from Maag & Stucki Automotive (MSA) after allegations of poaching clients.

Background

Rosenthal, a BMW specialist mechanic employed since 2016, worked at MSA, a Sydney-based workshop servicing luxury vehicles. In September 2024, he was confronted by director Adan Cummings over allegations of soliciting clients for private work. The heated exchange ended with Rosenthal leaving the workplace.

MSA argued he had abandoned his employment after being caught trying to undercut the business, while Rosenthal said he was directly dismissed in anger and accused of theft.

Employee’s Perspective

Rosenthal maintained that:

  • He had long been allowed to do private weekend work with management’s knowledge.
  • The alleged solicitation incident was a misunderstanding — he had only given a colleague a rough parts price and joked that the boss should not be told.
  • He never intended to steal clients and felt humiliated by being told to “pack up and leave.”
  • With eight years’ service and specialist skills, he argued dismissal was disproportionate and harsh.

Employer’s Case

MSA claimed:

  • Rosenthal breached clear rules forbidding private work for existing clients.
  • He had been caught offering cheaper services behind the business’s back.
  • His conduct broke the trust essential in a small, specialist business.
  • He was not dismissed but chose to abandon his job after confrontation.

The Commission’s Findings

Deputy President Wright concluded:

  • Rosenthal had in fact been dismissed, not resigned.
  • The employer’s evidence did not prove he had solicited clients or engaged in serious misconduct.
  • There was therefore no valid reason for dismissal.
  • Given his long service and the manner of termination, the dismissal was harsh, unjust, and unreasonable.

The Outcome

The Commission ruled that Rosenthal should not be reinstated due to the breakdown in trust but is entitled to compensation in lieu of reinstatement.

  • His potential losses were assessed at around $91,800 (a year’s pay), but under the Fair Work Act cap, the maximum payable was $45,912.36.
  • The exact figure will be finalised after Rosenthal provides details of post-dismissal earnings.

Lessons for Employers & Employees

This decision highlights key lessons:

  • Clear boundaries are critical: If private work is permitted, rules must be written, consistent, and well-communicated.
  • Evidence matters: Dismissals must be based on solid, verifiable misconduct — not suspicion or workplace rumours.
  • Process protects everyone: Heated arguments and snap decisions risk legal challenges. Formal warnings, documented investigations, and clear termination notices are essential.
  • Trust cuts both ways: Employees must respect confidentiality and business rules, while employers should balance enforcement with fairness and proportionality.

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