Employees with Competing Businesses Not Unfairly Dismissed

Two decisions handed down by the Fair Work Commission (FWC) last week dealt with employees dismissed for operating a business in competition with the employer.  Both cases involved small business employers (i.e. employing fewer than 15 employees) and the FWC found in favour of the employer in each case.

Reasonable belief

The first case, Gilani v GNZ Enterprises Pty Ltd, involved a business which modifies vehicles for drivers with disability.  The Applicant in the case, Mr Gilani, had set up his own vehicle modification business several months before his dismissal.  While the employer sought to rely on several different reasons for the dismissal, the fact the employer had formed a ‘reasonable belief’ Mr Gilani was operating a competing business was sufficient for the Commission to find the dismissal was consistent with the Small Business Fair Dismissal Code and therefore, not unfair.

No opportunity to respond

It is of note that the employer did not provide Mr Gilani with an opportunity to respond to its concerns before dismissing him.  Had the employer not been a small business employer, that procedural deficiency would likely have resulted in the Commission finding the dismissal was unfair.  Indeed, Deputy President Sams commented that:

Had this matter not arisen under the statutory constraints applicable under the Code, in respect to procedural unfairness considerations, I am confident that the applicant’s summary dismissal, without notice or warning, would have found to be unfair, but given that I accept Mr Zisti believed, on reasonable grounds, that the applicant’s conduct was sufficiently serious to justify his immediate (summary) dismissal, the respondent must have complied with the Code. Accordingly, the applicant could not have been unfairly dismissed, pursuant to s 385(c) of the Act.

Gilani v GNZ Enterprises Pty Ltd T/A Right Price Conversions [2018] FWC 1719

The second case, Taylor v Auto Loans Group Pty Ltd, involved a finance broking business.  The Applicant, Mr Taylor, was dismissed on the grounds he was operating a competing business.  Again, the dismissal was found by the Commission to have been consistent with the Small Business Fair Dismissal Code although, in this case, the employer did put the issues to the employee before dismissing him.

Taylor v Auto Loans Group Pty Ltd T/A AutoCarLoans.com.au [2018] FWC 1950