1
Fair Work Act 2009
s.394—Unfair dismissal
Alex Yates
v
Stephanie Muir Ridge
(U2024/6365)
DEPUTY PRESIDENT DEAN CANBERRA, 11 NOVEMBER 2024
Application for an unfair dismissal remedy – resigned or dismissed – Applicant unfairly
dismissed.
[1] On 4 June 2024 Mr Alex Yates (Applicant) made an application for a remedy pursuant
to s.394 of the Fair Work Act 2009 alleging that he was unfairly dismissed from his employment
with Stephanie Muir Ridge (Respondent).
[2] The Respondent raised a jurisdictional objection on the ground that the Applicant
voluntarily resigned and was therefore not dismissed. This is disputed by the Applicant.
[3] The application was heard on 10 October 2024. The Applicant was self-represented and
gave evidence on his own behalf. Mr C Niven appeared with permission for the Respondent
and evidence was given for the Respondent by Ms Stephanie Ridge and Ms Lisa Matters.
[4] For the reasons outlined below, I find that the Applicant did not resign and was unfairly
dismissed.
Background
[5] The Respondent conducts a business called Intentional Care which provides NDIS and
home care type services.
[6] The Applicant commenced employment with the Respondent on 14 March 2023 and
was shortly thereafter promoted to Director of Operations.
[7] An issue arose in April 2024 in relation to the Applicant’s rate of pay. Following a
telephone call between the Respondent and the Applicant on 14 May 2024 in relation to the
Applicant’s pay, the Respondent asserts that the Applicant resigned verbally and in a text
message that was sent just after the phone call ended. The text message is in the following
terms:
[2024] FWC 2973 [Note: An appeal pursuant to s.604 (C2024/8500) was
lodged against this decision.]
DECISION
AUSTRALIA FairWork Commission
[2024] FWC 2973
2
“Will be making a report to fair work and contacting a lawyer today. There’s a reason
staff talk to me, not you. Good luck doing it by yourself”.
[8] About one hour after this text message was sent, the Respondent posted in the staff
WhatsApp channel that the Applicant had resigned.
[9] The Applicant denies he resigned and that the text message constituted a resignation.
The case for the Applicant
[10] The Applicant says there was an agreement between him and the Respondent that they
were to become business partners. In cross examination, the Respondent agreed that she
referred to the Applicant as her ‘business partner’. As a result of that agreement, a meeting took
place with the Respondent’s accountant on 25 September 2023 to organise the best way to
structure a company and form a partnership. He provided evidence of an email with the
accountant in support of this agreement.
[11] As there were insufficient funds in the business at that time to start a company, the
Applicant agreed to work at a lower pay rate to allow the parties to save the necessary funds.
He says that each time it seemed that enough money may have been saved, the money would
‘disappear’ from the account, because the Respondent had withdrawn the funds.
[12] On 25 April 2024 the Respondent informed the Applicant she intended to increase her
weekly pay. The parties met on 26 April to discuss her pay increase. The Applicant says he was
upset, given he was being paid for less hours than he was working, and he felt she was not
honouring their agreement in relation to progressing the partnership. He was also upset because
the business could not afford to the pay increase.
[13] At that time, he said, the business was utilising a large overdraw to cover staff wages,
and the Respondent was also using funds that had been set aside for superannuation and BAS
payments to pay staff wages.
[14] The Applicant gave evidence that during the meeting on 26 April he said he didn’t
believe she was serious about the partnership given they had been trying to save the money to
restructure and set up a company for over one year, and that he believed he had already paid
his way into the partnership. As a result, he wanted equal pay to her. He said the Respondent
replied saying “I agree, you’ve paid your way, that’s fine, put your pay up”.
[15] On 3 May 2024 the Applicant emailed the Respondent’s bookkeeper to say that his last
pay was lower than it should have been and set out the amount he said he ought to have been
paid. He sent a further email to the bookkeeper the same day saying that: “Stephanie is aware
of the increase in my pay rate. After she increased her weekly draw to $2500 we agreed I would
get the same. Its been this way for a couple of pays now, I’m guessing Mariana didn’t update
the template?” Mariana was the previous bookkeeper and the Applicant’s former partner.
[16] The Applicant says he also spoke with the Respondent about his pay around this time.
[2024] FWC 2973
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[17] On 13 May his pay was again short, and the shortfall in the previous pay had not been
rectified, so he called the bookkeeper on 14 May who said he needed to discuss the matter
directly with the Respondent. He then called the Respondent and asked why his pay was short
when it was meant to be $2500 per week. He gave evidence that the Respondent denied any
agreement about increasing his pay. He said he was shocked and accused her of lying.
[18] He told the Respondent that she had agreed to equal pay and that he wouldn’t continue
to work for her for less than she was paying herself, as he “had already paid my own way and
was doing the vast majority of the work”. He said she would not be able to run the business on
her own, and he couldn’t believe that she would lie about their agreement. He also said it was
likely she would lose staff members and she would struggle to run the business if he left. At
that point, the Respondent ended the call by hanging up on the Applicant.
[19] The Applicant said he was “in absolute shock at having just been lied to, cheated and
betrayed like that, I couldn’t believe what was happening”. He then sent the text message set
out at paragraph [7] above to “drive the point home that she still needed me to run the company,
as I felt like she was looking to get rid of me and nullify the partnership agreement”.
[20] As noted earlier, about one hour later the Respondent posted in the WhatsApp chat that
the Applicant had resigned.
[21] He then contacted the lawyer that had been used by the business to create the contracts
for the partnership. It took some time to get hold of the lawyer who advised him not to reply to
the Respondent and wait until he could discuss the matter with a different lawyer in the firm
who specialised in employment law. He did not hear back from the lawyer for some days, at
which time he was informed that the firm had a conflict of interest and could not represent him.
[22] The Applicant gave evidence that he was contacted by several staff members after the
Respondent posted the WhatsApp message saying he had resigned, and he informed them he
had not quit. One of those staff members, Ms La Spada, provided a written statement for these
proceedings to the effect that the Applicant told her at that time he did not quit, and that he
thought the Respondent was trying to get rid of him because of the dispute about his wage being
lowered and because she did not want to proceed with the partnership. Ms Cook, another
employee, also provided a statement to the effect that she spoke with the Applicant on 16 May
who told her that he had not resigned and he was devastated about what had happened given
the long hours and hard work he had put into the business.
[23] The Respondent had also advised staff via WhatsApp that another employee, Ms
Matters, would take over some of the Applicant’s responsibilities. The Applicant spoke with
Ms Matters and told her he felt like she was taking his job and enabling the Respondent to fire
him.
[24] The Applicant continued to perform some work for the next few days until on 16 May
he received an email from the Respondent instructing him not to talk to staff or clients, and not
to access any work accounts.
[2024] FWC 2973
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[25] The Applicant gave evidence that he had worked 7 days a week and had put his heart
and soul into building the business, and there was no way he would walk away from the business
in those circumstances.
[26] In response to the evidence given by Ms Matters, to the effect that the Applicant told
her he did resign, the Applicant adamantly denied this, saying he had said he was upset about
being fired and that the Respondent had falsely claimed he had resigned.
The case for the Respondent
[27] The Respondent gave evidence that she spoke with the Applicant on 14 May about what
she said was a discrepancy in his pay, that being that the Applicant had increased his pay in
excess of the $55 per hour that had been agreed. She said the Applicant: “was initially taken
aback”, and then went on to state:
“a. He ran the Company and not me;
b. He shouldn’t have to justify being paid more;
c. I was financially irresponsible;
d. I would be able to do it (run the company) without him”.
[28] She gave evidence that the Applicant then said: “I quit! I’m going! I’m going to take the
staff with me. They will come with me. You won’t be able to do it without me”.
[29] The Respondent gave evidence that while the Applicant was initially taken aback, his
voice changed over the course of the conversation which caused her concern and fear.
[30] The Applicant then sent her a text message which included the words: “Good luck doing
it by yourself”.
[31] The Respondent gave evidence that the former bookkeeper had been the Applicant’s
partner, and he had used his influence over her to change his pay rate above that which had
been agreed.
[32] The Respondent’s Form F3 Employer Response states that on 20 May 2024 the
Respondent sought that the Applicant confirm his resignation in writing. On 21 May the
Applicant replied saying that: “I have not resigned from my position with intentional care, nor
do I have any intention of doing so”.
[33] Ms Matters gave evidence that she received a telephone call from the Applicant on
14 May, during which he told her he had resigned, and he then proceeded to make a number of
disparaging statements about the Respondent.
[34] In her oral evidence, the Respondent said she was not surprised the Applicant resigned
because their relationship had been deteriorating for some time.
When is a person ‘dismissed’?
[35] The meaning of ‘dismissed’ is defined in s.386(1) of the Act which states:
[2024] FWC 2973
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(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on
the employer’s initiative; or
(b) 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.
[36] In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli1 (Bupa), a Full Bench of the
Commission examined the relevant authorities as to what constitutes ‘dismissed’ under s.386(1)
which included the following:
(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where,
although the employee has given an ostensible communication of a resignation, the
resignation is not legally effective because it was expressed in the “heat of the
moment” or when the employee was in a state of emotional stress or mental
confusion such that the employee could not reasonably be understood to be
conveying a real intention to resign. Although “jostling” by the employer may
contribute to the resignation being legally ineffective, employer conduct is not a
necessary element. In this situation if the employer simply treats the ostensible
resignation as terminating the employment rather than clarifying or confirming with
the employee after a reasonable time that the employee genuinely intended to resign,
this may be characterised as a termination of the employment at the initiative of the
employer.
(2) A resignation that is “forced” by conduct or a course of conduct on the part of the
employer will be a dismissal within the second limb of the definition in s.386(1)(b).
The test to be applied here is whether the employer engaged in the conduct with the
intention of bringing the employment to an end or whether termination of the
employment was the probably result of the employer’s conduct such that the
employee had no effective or real choice but to resign. Unlike the situation in (1),
the requisite employer conduct is the essential element.
[37] In Lance Gunther & Michele Daly v B & C Melouney T/A Easts Riverside Holiday Park2
Deputy President Sams noted the following when considering whether the applicant was
dismissed:
a. Jurisdiction can only exist where termination of employment at the initiative of the
employer has occurred. ‘Initiative’ is relevantly defined in the New Shorter Oxford
Dictionary as: “the action of initiating something or of taking the first step or the
lead; an act setting a process or chain of events in motion; an independent or
enterprising act.”
b. This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd
(Mohazab) where a Full Court of the Industrial Relations Court of Australia said,
‘… a termination of employment at the initiative of the employer may be treated as
a termination in which the action of the employer is the principal contributing factor
which leads to the termination of the employment relationship.’
[2024] FWC 2973
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c. In Mohazab, the Full Court also said:
‘In these proceedings it is unnecessary and undesirable to endeavour to formulate
an exhaustive description of what is termination at the initiative of the employer but
plainly an important feature is that the act of the employer results directly or
consequentially in the termination of the employment and the employment
relationship is not voluntarily left by the employee. That is, had the employer not
taken the action it did, the employee would have remained in the employment
relationship.’
d. A Full Bench of the AIRC in Stubbs v Austar Entertainment Pty Ltd said, ‘… to
constitute termination at the initiative of the employer the termination must be the
direct or consequential result of ‘some action on the part of the employer intended
to bring the employment to an end and perhaps action which would, on any
reasonable view, probably have that effect ...’[Rheinburger v Huxley Marketing, 16
April 1996 per Moore J].
Conclusion as to dismissal
[38] I am satisfied on the evidence that the Applicant did not resign for the following reasons:
a. To the extent there is a dispute about what was said in the phone conversation
between the parties on 14 May 2024, I prefer the evidence of the Applicant. His
actions after this conversation do not support a finding that he resigned at that time.
b. The text message relied on by the Respondent is ambiguous at best and is
explainable for the reasons given by the Applicant in his evidence.
c. The Applicant continued to perform work between 14 and 16 May until he was
directed by the Respondent to cease talking to staff or clients and not to access any
work accounts. He would not have continued to work had he resigned.
d. I am not satisfied that the Applicant unilaterally changed his pay rate above that
which had been agreed. I am satisfied that the agreement between the parties,
consistent with their intention to be business partners, was that the Applicant and
the Respondent would be paid the same amount. I am satisfied that the Applicant
would not have resigned given his firm belief as to the agreement between him and
the Respondent about becoming a partner in the business.
e. On 20 May the Respondent sought to have the Applicant confirm in writing that he
resigned. The Applicant replied the following day in writing confirming that he had
not resigned and had no intention of doing so. There is no evidence that the
Respondent sought to clarify this position with the Applicant or reply asserting the
Applicant had resigned on 14 May. This supports a finding that the Applicant did
not resign.
[2024] FWC 2973
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f. Finally, I accept the Applicant had put significant work into building the business
and entering into a partnership with the Respondent, and would not have simply
walked away from this in circumstances where he felt he had already “paid his way”
into the partnership.
[39] I am satisfied that this was a termination at the initiative of the Respondent and as a
result I find the Applicant was dismissed within the meaning of the Act. I am also satisfied that
he is otherwise a person protected from unfair dismissal. Accordingly, I now need to determine
whether his dismissal was unfair.
Was the dismissal unfair?
[40] A dismissal is unfair if the Commission is satisfied on the evidence that the
circumstances set out at s.385 of the Act existed. Section 385 provides the following:
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code;
and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see
section 388.
[41] I have found that the Applicant was dismissed, and subsections (c) and (d) do not apply.
Was the dismissal harsh, unjust or unreasonable?
[42] Section 387 of the Act provides that, in considering whether it is satisfied that a
dismissal was harsh, unjust or unreasonable, the Commission must take into account:
a. whether there was a valid reason for the dismissal related to the person’s capacity
or conduct (including its effect on the safety and welfare of other employees); and
b. whether the person was notified of that reason; and
c. whether the person was given an opportunity to respond to any reason related to the
capacity or conduct of the person; and
d. any unreasonable refusal by the employer to allow the person to have a support
person present to assist at any discussions relating to dismissal; and
e. if the dismissal related to unsatisfactory performance by the person – whether the
person had been warned about that unsatisfactory performance before the dismissal;
and
[2024] FWC 2973
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f. the degree to which the size of the employer’s enterprise would be likely to impact
on the procedures followed in effecting the dismissal; and
g. the degree to which the absence of dedicated human resource management
specialists or expertise in the enterprise would be likely to impact on the procedures
followed in effecting the dismissal; and
h. any other matters that the FWC considers relevant.
[43] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or
unreasonable’ was explained in Byrne v Australian Airlines Ltd3 as follows:
“... It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust because
the employee was not guilty of the misconduct on which the employer acted, may be
unreasonable because it was decided upon inferences which could not reasonably have
been drawn from the material before the employer, and may be harsh in its consequences
for the personal and economic situation of the employee or because it is disproportionate
to the gravity of the misconduct in respect of which the employer acted.”
[44] The onus is on the Applicant to prove his dismissal was harsh, unjust and/or
unreasonable.
[45] I am required to consider each of these criteria, to the extent they are relevant to the
factual circumstances before me.4
Valid reason - s.387(a)
[46] In order to be a valid reason, the reason for the dismissal should be “sound, defensible
or well founded”5 and should not be “capricious, fanciful, spiteful or prejudiced.”6 However,
the Commission will not stand in the shoes of the employer and determine what the Commission
would do if it was in the position of the employer.7
[47] There is no mandate for giving the ‘valid reason’ criterion any greater emphasis or
weight than any of the other criteria in s 387. It is well settled that the statutory requirement to
‘have regard to’ or ‘take into account’ requires the Commission to give the matter(s) weight as
a fundamental element in the decision-making process. Even if it is found that there was a valid
reason for the dismissal, an overall assessment must be made as to whether the dismissal was
harsh, unjust or unreasonable.
[48] The Respondent asserts that the Applicant unilaterally and without permission increased
his pay rate, and this constituted serious misconduct warranting dismissal.
[49] I am not satisfied that this occurred. I find that the Applicant and the Respondent had
agreed that the Applicant would be paid the same amount as the Respondent. It is clear in the
evidence that the Respondent approved payments made to all employees within Xero, the
business’ accounting software, including payments made to the Applicant. She clearly approved
[2024] FWC 2973
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the payments made to the Applicant that she now disputes. I do not accept the Applicant used
his relationship with the former bookkeeper (his former partner) to, in essence, misappropriate
funds or engage in fraud. The Applicant’s actions in contacting both the new bookkeeper and
the Respondent to dispute his pay are not the actions of someone who has misappropriated
funds. He was asserting what he genuinely believed were his pay entitlements.
[50] The Respondent asserts that there is a valid reason for dismissal which arises from the
Applicant’s post-employment conduct, that being inappropriate commentary regarding the
Respondent and a breach of contractual obligations.
[51] I accept the Applicant’s comments about the Respondent were not flattering. The
comments included that her staff did not like her or respect her, that she has lied, that clients
were unhappy with her, and that she was using business funds to pay for her wedding. Clearly,
he was upset about what had occurred. As he described, he felt betrayed by the Respondent and
said that never in his wildest dreams did he imagine she would be so dishonest. I am not
satisfied, though, that his post-employment comments were serious enough to ground a valid
reason for his dismissal in these circumstances.
[52] As a result, I find that there was no valid reason for the Applicant’s dismissal.
Notification of the valid reason and opportunity to respond - s.387(b) and (c)
[53] Notification of a valid reason for termination must be given to an employee protected
from unfair dismissal before the decision is made,8 in explicit terms9 and in plain and clear
terms.10 In Crozier v Palazzo Corporation Pty Ltd11 a Full Bench of the Australian Industrial
Relations Commission dealing with similar provision of the Workplace Relations Act 1996
stated the following:
“[73] As a matter of logic procedural fairness would require that an employee be
notified of a valid reason for their termination before any decision is taken to terminate
their employment in order to provide them with an opportunity to respond to the reason
identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it
was sufficient to notify employees and give them an opportunity to respond after a
decision had been taken to terminate their employment. Much like shutting the stable
door after the horse has bolted.”12
[54] An employee protected from unfair dismissal must also be provided with an opportunity
to respond to any reason for dismissal relating to the conduct or capacity of the person. Such
requirement will be satisfied where the employee is aware of the precise nature of the
employer’s concern about his or her conduct or performance and has a full opportunity to
respond to this concern.13 This criterion is to be applied in a common sense way to ensure the
employee is treated fairly and should not be burdened with formality.14
[55] The requirement to notify of the reason, together with the requirement to provide an
opportunity to respond to the reason, involves consideration of whether procedural fairness was
afforded to the Applicant before his dismissal was effected.
[2024] FWC 2973
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[56] The Respondent submits that the Applicant was aware of her concerns regarding his pay
and was given an opportunity to respond to these concerns.
[57] Because I am not satisfied that there was a valid reason related to dismissal, this factor
is not relevant in the present circumstances, as the inquiry to be made here is whether the
Applicant was notified of the ‘valid reason’, and given an opportunity to respond to that reason,
before a decision was made to dismiss him.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[58] Where an employee protected from unfair dismissal has requested a support person be
present to assist in discussions relating to the dismissal, the employer should not unreasonably
refuse that person being present.
[59] This is not a relevant consideration in this matter.
Warnings regarding unsatisfactory performance - s.387(e)
[60] A warning for the purposes of s.387(e) must clearly identify:
a. the areas of deficiency in the employee’s performance;
b. the assistance or training that might be provided;
c. the standards required; and
d. a reasonable timeframe within which the employee is required to meet such
standards.15
[61] The warning must also “make it clear that the employee’s employment is at risk unless
the performance issue identified is addressed.”16
[62] This was not a dismissal related to unsatisfactory performance and so this consideration
is not relevant in this matter.
Impact of the size of the Respondent on procedures followed (s.387(f)), and the absence of
dedicated human resources management specialist/expertise on procedures followed
(s.387(g))
[63] The Respondent submitted that the small business is ‘not sophisticated’ and does not
maintain access to a dedicated human resource professional.
[64] I accept that the absence of dedicated human resource expertise impacted on the
procedures followed by it in effecting the dismissal.
Other relevant matters - s.387(h)
[65] Section 387(h) of the Act provides the Commission with a broad scope to consider any
other matters it considers relevant.
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[66] The Respondent submitted that the business was significantly impacted by matters
involving the Applicant which affected its revenue and operational capacity.
[67] I do not consider there are any other matters that are relevant in this case.
Conclusion as to unfairness
[68] Having carefully considered each of the required matters, I am satisfied that the
Applicant has discharged his onus of proving that his dismissal was harsh, unjust and
unreasonable, and therefore unfair.
Remedy
[69] Having found that the Applicant’s dismissal was unfair, it is necessary to consider what,
if any, remedy should be granted to him. The Applicant seeks the remedy of compensation.
[70] Under section 390(3) of the Act, I must not order the payment of compensation unless:
a. I am satisfied that reinstatement is inappropriate; and
b. I consider an order for payment of compensation is appropriate in all the
circumstances of the case.
[71] In this case, I am satisfied that reinstatement is inappropriate, and an order for payment
of compensation is appropriate.
[72] In considering what is appropriate compensation, I must consider the factors which are
set out in s.392(2) of the Act and which include:
a. the effect of the order on the viability of the Respondent’s enterprise;
b. the length of the Applicant’s service;
c. the remuneration that the Applicant would have received, or would have been likely
to receive, if the Applicant had not been dismissed;
d. the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant
because of the dismissal;
e. the amount of any remuneration earned by the Applicant from employment or other
work during the period between the dismissal and the making of the order for
compensation;
f. the amount of any income reasonably likely to be so earned by the Applicant during
the period between the making of the order for compensation and the actual
compensation; and
g. any other matter that the Commission considers relevant.
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[73] The evidence and submissions filed by the parties did not address these factors.
Accordingly, directions will be separately issued for evidence to be filed so proper
consideration can be given to the appropriate compensation.
DEPUTY PRESIDENT
Appearances:
A Yates on his own behalf.
C Niven of Tailored Legal for Stephanie Muir Ridge.
Hearing details:
2024.
By video:
October 10.
Printed by authority of the Commonwealth Government Printer
PR780631
1 [2017] FWCFB 3941.
2 [2012] FWA 2473.
3 (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.
4 Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP,
Lacy SDP, Simmonds C, 21 March 2002), [69].
5 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
6 Ibid.
7 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
8 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].
9 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
10 Previsic v Australian Quarantine Inspection Services Print Q3730.
11 (2000) 98 IR 137.
12 Ibid at 151.
13 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
14 RMIT v Asher (2010) 194 IR 1, 14-15.
15 McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd [2013] FWC 3034, [32].
16 Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].
OF THE PAIR WORK THE FAIR ORK CO ADOTSALLA MMISSION THE SEALO
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