BACKED INTO A CORNER SERIES  |  No. 1

The One Who Runs the Place

When your most experienced employee decides the rules are optional, and you feel like the Fair Work Act is on their side.

By Paulette McCormack, Founder and Director, Fresh HR Insights. Practical HR guidance informed by my years of training, education and experience. This is general information, not legal advice. Please get advice on your own facts before you act.

The situation

I want to tell you about Mel. She is not one client; she is about a dozen of them, blended together, and if you run a small business you may recognise her.

Mel runs a landscaping and grounds maintenance business out of Nerang. Nine people, two crews, eleven years of hard work. Her senior supervisor, Dean, has been with her for eight of those years. He is the best operator she has ever had. Clients ask for him by name. He can look at a block and tell you what it will cost before the tape measure comes out.

And for the last eighteen months, Dean has been running the place.

Mel introduced a job-management app so the crews log their hours, photos and materials on site. Dean refuses to use it. “I have never needed an app to do my job.” His crew follows his lead, so Mel spends Sunday nights reconstructing timesheets from memory and text messages. She brought in pre-start safety checks after a near miss with a ride-on mower. Dean signs them off in the ute without doing them. When Mel raised it, he told her she was “making the boys feel like criminals”.

The two apprentices are on Dean’s crew. One of them quietly asked Mel whether he could move across to the other crew. He would not say why. Mel already knows why. She has heard Dean tear strips off him in the yard.

Then came the line that keeps Mel awake. After the last conversation about the app, Dean said: “If you push this, I will go to Fair Work. And half the boys will walk with me.”

So Mel does nothing. She cannot afford to lose him. She cannot afford to keep him. And she believes, sincerely, that the Fair Work Act would take his side.

Why it feels like the Act is against you (and where the balance actually sits)

Let me be honest about the parts that are true, because pretending otherwise does not help anyone.

Dean is protected from unfair dismissal. He has served well past the minimum employment period (twelve months in a small business, s 383 of the Fair Work Act 2009), and Mel has fewer than 15 employees, so she is a small business employer (s 23). If she dismisses him and he applies within 21 days (s 394), the Commission will ask whether the dismissal was harsh, unjust or unreasonable (s 385), and whether it was consistent with the Small Business Fair Dismissal Code (s 388). Length of service, a clean record, and the personal impact on Dean will all count against her if she gets it wrong. That is the part that feels like the Act favours him.

Now the other half, which owners rarely hear.

Every employee has a duty to follow lawful and reasonable directions. It is part of the employment relationship itself, and most contracts spell it out. A direction is lawful if it does not require anything illegal or outside the contract and award, and reasonable if it is connected to the work, has a sensible business purpose, and is clearly communicated. “Log your hours in the app” and “do the pre-start check before you start the mower” are about as reasonable as directions get. One is about being paid correctly and invoicing clients honestly; the other is about a person not losing a foot.

Refusing a lawful and reasonable direction is expressly recognised as serious misconduct in the Regulations (reg 1.07(3)(c), where the refusal is to carry out a lawful and reasonable instruction consistent with the contract). Deliberate, repeated refusal after warnings is a valid reason for dismissal under s 387(a). Treating junior staff in a way that leaves them wanting to leave is, in a business with a code of conduct or even a basic set of expectations, a valid reason too.

And the Small Business Fair Dismissal Code is not a trap for owners. It is a map. For anything short of summary dismissal, it asks three things: warn the person, preferably in writing, that their job is at risk if they do not improve; give them a reasonable chance to improve; and give them a reasonable opportunity to respond. For summary dismissal it asks that you hold a belief, on reasonable grounds and after a reasonable investigation, that the conduct was serious enough to justify immediate dismissal.

The Act does not favour Dean. It favours whoever can show, on paper, that they behaved reasonably. Right now that is nobody, because nothing has been written down. That is the thing Mel can change.

What can reasonably be done?

This is the path I walk with owners like Mel. It is not complicated. It is just easy to get wrong under pressure, and every step has a trap in it.

Step 1. Separate the problems

Mel has three issues tangled together: refusing the app, skipping safety checks, and how Dean treats the apprentices. They are not the same issue and they do not carry the same weight. Safety and staff treatment are conduct. The app is a direction he is refusing. Write them down as separate items with dates and examples. If you cannot describe a problem in one plain sentence with a date attached, you are not ready to raise it.

The trap: lumping everything into one furious conversation. The Commission will later look for what was actually put to him, and “you have a bad attitude” is not a valid reason for anything.

Step 2. Check the paperwork before you say a word

Pull Dean’s contract. Does it require him to follow lawful and reasonable directions and comply with policies? Most do. Is there a written policy or even an email that introduced the app and the pre-start checks? Was the safety requirement communicated to everyone? Is Dean’s award and classification right, so that nothing you are asking sits outside his hours or duties? This is where the PaperCut case below was won: not in the meeting, but in the contract and the policy.

The trap: discovering mid-process that the contract is a 2018 template, the app was only ever mentioned verbally, and the pre-start checklist was never formally rolled out. Fix the foundations first.

Step 3. Give the direction properly, once, in writing

A short, respectful letter or email: here is what I need you to do, here is why, here is when it starts, and here is who to talk to if there is a reason you cannot. Invite the reason. Sometimes there is one (the app does not work on his phone; the pre-start form is unclear). A direction that has been explained, with a business reason and a chance to raise problems, is a reasonable direction. Keep a copy.

The trap: giving the direction verbally in the yard in front of the crew. It becomes a contest, not a direction.

Step 4. Meet, listen, and warn in writing if it continues

If the refusal continues, hold a proper meeting. Tell him in advance what it is about. Offer a support person. Put each issue to him and let him respond. Then decide. If a warning is warranted, make it a written warning that names the conduct, states clearly what must change, and says in plain words that his job is at risk if it does not. That sentence is what the Code is looking for.

The trap: the “verbal warning” that lives only in the owner’s memory. In the Depp case the employee believed she had received a verbal warning; it did the employer no good at all.

Step 5. Investigate the staff-treatment concerns separately

Talk to the apprentices privately. Write down what they say, in their words, with dates. If the accounts are consistent, put the specific allegations to Dean in writing and give him a real chance to answer before you decide anything. This is exactly what the aged care employer in the Filamor case did, and it is why they won: consistent accounts from several team members, a show-cause letter, time to respond, and a decision made after the response, not before.

The trap: deciding the outcome before the meeting. If the letter is written, the crew has been told and the replacement is lined up before Dean has answered, the Commission will see predetermination.

Step 6. If it comes to dismissal, follow the Code to the letter

For repeated refusal after a written warning and a genuine chance to improve, the “other dismissal” path of the Code applies: warning, opportunity to improve, opportunity to respond, then notice. Summary dismissal is only for conduct serious enough to justify it, and only after you have reasonably investigated and can show reasonable grounds for your belief. Signing off safety checks without doing them, in a business that runs ride-on mowers around apprentices, may well get there. Refusing an app almost certainly does not.

The trap: dismissing on the day, by text or email, in the heat of it. That is what happened in the Depp case in Brisbane. Reasonable owner, unreasonable moment, unfair dismissal.

What the Commission has Actually Said

These are recent decisions. I have linked the Commission’s published decision for each so you can read them yourself. I have chosen two where the employer got it right and two small-business cases, one won and one lost, because the contrast is the lesson.

Johnson v PaperCut Software Pty Ltd [2026] FWC 178

Commissioner Connolly, Melbourne  |  19 January 2026  |  Read the decision: https://www.fwc.gov.au/documents/decisionssigned/pdf/2026fwc178.pdf

What happened

Mr Johnson was a product engineer hired by PaperCut Software in April 2022, when remote work was the norm. His contract said he was “permitted to work from their personal residence … in line with relevant PaperCut policy” and “may be required to work at other locations from time to time”, and required him to comply with company policies. After consultation, PaperCut introduced a hybrid policy in August 2023 requiring three days a week in the office, phased in. Mr Johnson attended one day a week. He was told in December 2024 that the office would be his primary location from January 2025, received a final written warning in May 2025, and was dismissed in June 2025 for continued non-compliance.

What was decided

Commissioner Connolly found the direction to attend the office was lawful and reasonable, that working from home was something PaperCut had “allowed” rather than an unconditional right, and that the dismissal was not harsh, unjust or unreasonable. The application was dismissed and reinstatement refused.

The merits, and what a small business should take from it

PaperCut is a mid-sized employer, but the reasoning is exactly what a small business needs to hear. The employer won because of three unglamorous things: a contract that made the arrangement conditional on policy, a policy that was consulted on and rolled out in stages, and a documented sequence of direction, warning, final warning, and time to comply. Mr Johnson offered no personal circumstances that made compliance unreasonable; he simply believed he had a right he did not have. Swap “work from the office” for “use the job app” and you have Mel and Dean. The question is never “can I make him”. It is “can I show I asked properly, explained why, warned him, and gave him the chance”.

Filamor v Port Stephens Veterans and Citizens Aged Care Ltd [2026] FWC 2484

Deputy President Saunders, Newcastle  |  2 July 2026  |  Read the decision: https://www.fwc.gov.au/documents/decisionssigned/pdf/2026fwc2484.pdf

What happened

Mrs Filamor was employed as a Lifestyle and Engagement Manager at an aged care provider in Port Stephens from January 2025. Within months, two activities officers resigned citing her management style in their exit interviews, and two more team members became distressed after a resident event and indicated they wanted to leave. Team members described her yelling, speaking rudely and leaving staff in tears; two sought treatment from their GP. She had also disagreed with, and not complied with, a direction to scale back resident activities, and continued emailing her team after being directed to take leave and leave her work devices at the office. The employer investigated, issued a show-cause letter, considered her response, obtained sign-off from People and Culture and the chief executive, and dismissed her in November 2025 with four weeks’ pay in lieu of notice.

What was decided

Deputy President Saunders found there was a valid reason for dismissal: she had breached the code of conduct by failing to treat colleagues with courtesy and respect, and had failed to follow lawful and reasonable directions. The team members’ accounts were preferred as consistent and supported by medical evidence. The process (written notice of the allegations, a show-cause letter, and an opportunity to respond) satisfied procedural fairness; claims of bias, predetermination and a rushed timeline were rejected. Dismissal was proportionate. The application was dismissed. Notably, one allegation (that she had created an unsafe environment for residents) was not made out, and she was found to have shown no remorse at the hearing.

The merits, and what a small business should take from it

This is the “she runs the department and the good people are leaving” case. The employer had around 289 staff and in-house HR, which the Commission noted, but nothing they did is beyond a nine-person business: they listened to the people who were leaving, wrote down consistent accounts, put specific allegations to the manager in writing, gave her time to answer, and then decided. They also lost one allegation, which is a useful reminder to only run with what you can actually evidence. The refusal to follow directions (both the operational one and the “step away from the email” one) sat alongside the conduct as a valid reason in its own right. For Mel, the apprentices’ accounts are evidence. Gather it properly.

Depp v Oz Seaside Hair And Beauty Pty Ltd [2026] FWC 189

Deputy President Lake, Brisbane  |  29 January 2026  |  Read the decision: https://www.fwc.gov.au/documents/decisionssigned/pdf/2026fwc189.pdf

What happened

Ms Depp was a casual hairdresser at a salon that changed hands in December 2024; the new owner kept her on. In June 2025 she argued with the salon manager in front of a client. The owner dismissed her by email two days later with two weeks’ notice, citing the confrontation, the fact she had not signed a new contract, and reputational risk. Ms Depp worked on during her notice period. A second argument followed, the manager phoned the owner, and the owner revoked the notice period and terminated her immediately the same day for “unprofessional conduct”. The salon relied on the summary dismissal limb of the Small Business Fair Dismissal Code. The parties even disagreed about what was said: the salon alleged abusive language and a threat to take clients; Ms Depp said she said “this is bullshit” and denied swearing in front of clients.

What was decided

Deputy President Lake found the prior service counted (transfer of business, ss 311 and 22), that Ms Depp was a regular casual with a reasonable expectation of ongoing work, and that she was protected from unfair dismissal. On the Code, the owner held a belief that misconduct had occurred but it was “not, in my view, reasonable for her to simply rely on Ms Reid’s account given to her over the phone”, so there were no reasonable grounds and the dismissal was not consistent with the Code. On the merits, not signing a contract “does not amount to a valid reason for dismissal”, Ms Depp’s version of the language was preferred, and the client-contact conduct occurred after notice had already been given. There was no valid reason and no opportunity to respond. The dismissal was unfair. Compensation of $1,732.00 gross plus superannuation was ordered, reflecting about one further month of work before the relationship would likely have ended anyway.

The merits, and what a small business should take from it

I include this one because it is a Queensland small business doing what feels natural in the moment, and losing anyway. The owner had real concerns and the Commission agreed Ms Depp’s behaviour was inappropriate. What sank the salon was process, not substance: a decision made on a phone call, no allegations put to the employee, no chance to respond, and a “reason” (the unsigned contract) that was never a reason at all. The Commission expressly weighed the salon’s small size and lack of HR expertise in its favour, and it still was not enough. The dollar figure was small; the lesson is not. If Mel dismisses Dean by text on the day he refuses the app, this is her case.

Little v Parkside Inn Geelong Pty Ltd [2025] FWC 3063

Commissioner Yilmaz, Melbourne  |  13 October 2025  |  Read the decision: https://www.fwc.gov.au/documents/decisionssigned/pdf/2025fwc3063.pdf

What happened

Mrs Little was a regular casual at a Geelong hotel, employed for over two years by a business with fewer than 15 employees. In March 2025 she had an altercation with a co-worker: she admitted yelling, swearing and throwing her bucket, and disputed kicking a water bottle in the co-worker’s direction, though witnesses confirmed contact. Two months later the directors held a mediation meeting with both employees, managers, a witness, and Mrs Little’s support person. Mrs Little read a prepared apology “if she hurt anyone”. The co-worker rejected it as insincere and left distressed. Mrs Little was dismissed the next day.

What was decided

Commissioner Yilmaz found the employer “held the belief that the Applicant’s conduct was sufficiently serious to justify summary dismissal and carried out a reasonable investigation into the matter”, that the conduct fell within serious misconduct as behaviour causing serious and imminent risk to health or safety, and that the dismissal was consistent with the Small Business Fair Dismissal Code. The application was dismissed.

The merits, and what a small business should take from it

Here is the small business that got it right, and notice how little it took: the owners did not act on the day, they gathered the accounts, they brought everyone into a meeting with a support person, they heard the employee out, and only then decided. Same Code as the salon in Brisbane, opposite outcome, and the difference is entirely process. The other lesson is the honesty of the record: the employee’s own admissions (yelling, swearing, throwing the bucket) did most of the work. Ask the question and write down the answer.

What you can do as a small business owner

Can I dismiss someone just for refusing to do what I ask?

Sometimes, but not on the first refusal and not without a process. A refusal to follow a lawful and reasonable direction can be a valid reason for dismissal (and in serious, deliberate cases, serious misconduct). The Commission will still ask whether the direction was reasonable, whether the person understood it, whether they were warned, and whether they had a real chance to respond. Skip those steps and a good reason can still become an unfair dismissal.

What makes a direction “lawful and reasonable”?

Lawful means it does not ask the person to break the law or their contract or award. Reasonable is judged on the facts: is it connected to the job, is there a proper business reason, was it communicated clearly, and is it proportionate? “Use the job app so I can invoice accurately” is usually reasonable. “Work Saturdays from now on” may not be, depending on the contract and the award.

He has been here eight years. Does long service protect him?

Long service does not create a right to ignore instructions, but it matters in two ways. First, the Commission weighs length of service and a clean record when deciding whether a dismissal was harsh. Second, it raises the bar on process: a long-serving employee should expect a clear warning and a genuine chance to fix things before their job is on the line. In the PaperCut case a well-documented direction, a final warning and a chance to comply carried the day.

He says he will “go to Fair Work” if I push him. Should I back off?

No, and do not punish him for saying it either. Raising a concern or making an inquiry about employment is a workplace right under the general protections (s 340 and s 341). If he later claims you acted because he threatened a complaint, the onus is on you to prove otherwise (s 361). Keep managing the actual conduct, keep your reasons written down and contemporaneous, and the threat loses its power.

Does the Small Business Fair Dismissal Code make it easier for me?

It gives a small business (fewer than 15 employees, counting regular casuals) a clearer path, but it is not a shortcut. For anything other than summary dismissal, the Code expects a warning (preferably in writing) that the job is at risk, a real chance to improve, and a reasonable opportunity to respond. For summary dismissal you need reasonable grounds, after a reasonable investigation, to believe the conduct was serious misconduct. The Brisbane salon in the Depp case relied on the Code and still lost because it acted on a phone call and never asked the employee for her side.

What if he goes off on stress leave the moment I raise it?

Pause the process, do not abandon it. A medical certificate stops you from holding the meeting for now; it does not erase the conduct. Keep communication respectful and in writing, ask for a fitness-for-work update at a sensible interval, and pick the process back up when he returns. Reasonable management action carried out in a reasonable way is not bullying (s 789FD(2)), which is exactly why the “reasonable way” part matters.

What if the other staff really do walk?

Some might. In my experience most do not, and the ones who stay have usually been waiting for someone to deal with the problem. The apprentice who asked to change crews is telling you something. Culture follows what you tolerate, not what you put in the handbook.

How much could this cost me if I get it wrong?

Compensation for unfair dismissal is capped at the lesser of six months’ pay or half the high income threshold, and the Commission works out what the person would likely have earned had they not been dismissed. In the Depp case that came to one month’s casual earnings plus super, because the relationship was already breaking down. The bigger costs are usually the time, the stress, and the message it sends to everyone else in the business.

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