Fair Work uses common
sense to find an employer had just cause to summarily
dismiss an employee
It’s not feasible for many smaller businesses to employ a
human resources officer to discipline and dismiss employees
for poor work practices because the cost is not warranted
relative to their size.
And so it was for Majestic
Mushrooms that the tasks of training, maintaining good work
practices, disciplining and dismissing the staff fell upon
the proprietors, a husband and wife team with no human
resources qualifications or experience.
outlines the decision of the FairWork Commission in
Thidart (Tony) Wongkhosawan v Majestic Mushrooms Pty Ltd;
Thridsadi (Tae) Rose v Majestic Mushrooms Pty Ltd 
FWC 3974, a decision of Deputy President John Kovacic.
Tony and Tae, a
married couple, commenced employment with Majestic as casual
piece rate mushroom pickers on 30 November 2015. They were
paid a piece rate for each box they picked and packed – a
higher piece rate was payable for A-grade mushrooms than
They were trained in the art of
mushroom harvesting, to pick the full sized mushrooms daily
over the 4 day “flush” period, and to discard diseased, wet
and slimy mushrooms. They were allocated their own mushroom
beds, within temperature controlled rooms.
In January 2016
there was an outbreak of bubble disease, which is a serious
disease that disfigures mushrooms and makes them unsaleable.
Majestic brought in consultants, who introduced hygiene and
control processes to eradicate the disease. Tony and Tae and
all the staff participated in rigorous training. In late
June 2016 the bubble disease returned in Tony and Tae’s
picking sections – and instructions on hygiene were
In late September 2016, a large customer rejected 16
boxes of mushrooms, of which 11 had been packed by Tony and
Tae. The boxes were of poor quality because they had A-grade
mushrooms on top, and B-grade or spotted diseased mushrooms
mixed underneath at the bottom of the box. At a staff
meeting held the next day, all the staff were warned
verbally that if they were found “putting rubbish mushrooms
in their boxes” that they would be “sacked immediately”. The
rejected boxes packed by Tony and Tae were shown to them.
In December 2016, Tae complained about bullying by their
supervisor. A meeting was held, at which a verbal warning
was given that if one more problem arose, then it would
result in immediate dismissal. A letter was also handed
In January 2017, the same large customer wrote to
Majestic to complain that if they received any more boxes
packed with B-grade and diseased mushrooms below a top layer
of A-grade mushrooms, they would cease their business
relationship with Majestic. The boxes complained of had Tony
and Tae’s picker numbers. This letter was “the straw which
broke the camel’s back”.
On 18 January 2017, Tony and Tae
met with the proprietors, and the complaints were put. They
met again the next day, and in the absence of an adequate
response, they were dismissed summarily, and were handed
envelopes with their pay.
Tony and Tae appealed for unfair dismissal under s 385
(of the Fair Work Act 2009) – that it was harsh,
unjust or unreasonable. Each wanted an extra pay.
Unfortunately for Majestic, it did not qualify as a small
business employer (i.e. less than 15 employees) as it had 16
regular and systematic casual employees, and so was not
protected by the Small Business Fair Dismissal Code.
Deputy President assessed the dismissals against the
criteria for harshness set out in s 387 of the Act, and
concluded that the dismissals were not harsh, unjust or
- There was a valid reason for the dismissals, which
was the letter received from the large customer in
January 2017 had pointed to serious and recurring
performance issues involving the employees. The letter
came from an external source. There had been staff
meetings held previously to discuss these issues.
- The employees were notified of the reason and were
given an opportunity to respond.
- The employees had been warned on a number of
occasions previously about their underperformance,
including at a meeting the day before the dismissals,
and had not satisfactorily explained their
- In relation to the warning and dismissal procedures,
Deputy President Kovacic said:
“While the procedures followed by the [business] in this
case were not best practice in a technical sense, they
were not in my view unreasonable when regard is had to
the size of the business and the absence of human
resource specialists or expertise in the business.”
- inally, it was clear that the business proprietors
had lost confidence in the employees, and they could no
longer trust them to ensure the quality of the produce
packed in the boxes. There was also the risk to the
businesses’ “reputation and profitability stemming from
the employees’ conduct/performance, as exemplified by
the potential loss of their customer”.
businesses prefer to pay four weeks in lieu of notice
instead of fighting a FairWork Commission proceeding, if
a business has summarily dismissed an employee for good
cause, then it may succeed before the Commission despite
the fact that it has not followed “best practice”.