The applicant made a “courtesy phone call” to the director advising not to consider him in the long term plans of the company as he was thinking of purchasing a truck and trailer in order to work for himself. The applicant also mentioned his “future work aspirations” to a number of his colleagues.

A few days later, he was dismissed. The applicant insisted it was a “long term plan” and there was no conflict of interest because the businesses “target markets are entirely different.” The respondent builds retaining walls and does hire work, whereas the applicant’s future business was said to be in the supply and delivery of materials.

The director argued the applicant’s intention to start his business gave rise to a “real potential conflict of interest” and the possibility of him targeting clients whilst still working for the respondent. The respondent said in the circumstances he acted “fairly and justly” in anticipation of the conflict and the applicant’s diminished ability to perform safely and effectively on site as “his mind had already sort of left the company.”

Deputy President Bull held despite the director’s view, “no evidence was put before the commission that the applicant had placed himself in a position where his own interests would conflict with his duty to act in his employer’s interests, nor was it shown that the applicant seized upon or had any opportunities within the sphere of his employer’s operations to further his own interests which were prejudicial to the employer.” The dismissal was held to be unfair and the employee was award eight weeks’ wages.

This case highlights the importance of a well-founded reason for termination. Under current employment legislation, costly consequences await organisations found to terminating staff incorrectly. Attend our Managing Termination, Unfair Dismissals and Redundancy to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claims.

View the Fair Work Commission's decision.