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. 

This article outlines the decision of the FairWork Commission in Thidart (Tony) Wongkhosawan v Majestic Mushrooms Pty Ltd; Thridsadi (Tae) Rose v Majestic Mushrooms Pty Ltd [2017] FWC 3974, a decision of Deputy President John Kovacic.

The Facts 

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 B-grade mushrooms.

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 repeated. 

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 over. 

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. 

The Decision

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. 

The 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 unreasonable: 

  • 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 underperformance. 
  • 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.” 
  • Finally, 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”. 

Conclusion

While many 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”.