Ex-wife not unfairly dismissed despite process denial
A recent unfair dismissal claim brought before the Fair Work Commission has shown how working relationships can be complicated by marriage. The claim was brought by a woman who argued that she was unfairly dismissed by her ex-husband. This came after their marriage broke down and the husband left the family home to shack up with his new partner.
Procedural fairness denied, but not an unfair dismissal
The interesting thing about this unfair dismissal case is that the Fair Work Commission found that the wife was denied procedural fairness. Typically, the denial of procedural fairness by an employer will see the Fair Work Commission rule that the worker was unfairly dismissed. However, in this case the wife’s unfair dismissal claim was still unsuccessful.
This just goes to show that you can’t simply rely on a denial of procedural fairness for your unfair dismissal claim to be successful. As in the case of the wife, her denial of procedural fairness was outweighed by her conduct leading up to her dismissal. Let’s take a look at the events of this unfair dismissal case – Ms Karen Lee Norkett v Central Coast Floormaster Pty Ltd [2023].
Unfair dismissal case unveils fractured matrimonial relations
Karen Futcher and Scott Norkett were united in matrimony on 28 December 2014. A few years into their marriage in October 2017, the couple ventured into the flooring business by forming Central Coast Floormaster. Ms Futcher’s role at the company included admin, payroll and marketing duties. In June 2022, she stepped up her involvement in the business after she sold her pet grooming business.
But nearly a decade after their nuptials in February 2023, the wheels of Karen and Scott’s marriage fell off. This culminated in Mr Norkett moving out of the home he shared with Ms Futcher and moving in with his new partner.
The binding financial agreement
Key to this unfair dismissal case was that the couple sought legal recourse and entered into a binding financial agreement. This was made under section 90C of the Family Law Act 1975. The agreement was prepared by legal professionals acting for Ms Futcher and Mr Norkett. It aimed to address their impending separation and detailed their future roles within Central Coast Floormaster.
The binding financial agreement contained several crucial provisions. This included that:
1. Ms Futcher would resign as a Director of Central Coast Floormaster as of the agreement’s effective date.
2. Ms Futcher would transfer her shares in the company to Scott as of the date of the agreement.
3. Scott would shoulder all liabilities and indemnify Ms Futcher against any business debts or expenses from the commencement of the agreement.
4. Within 14 days of the agreement, Scott would ensure Ms Futcher’s removal as a borrower or guarantor concerning any company loans.
5. Ms Futcher would continue her employment with Central Coast Floormaster under existing terms for up to six months or sooner at her discretion.
6. Scott would facilitate the immediate transfer of Central Coast Floormaster’s motor vehicle rights, title and associated expenses to Ms Futcher for the same six-month duration.
The couple are forced to work closely together
The execution of these provisions required meticulous planning and cooperation. It entailed significant administrative adjustments. This included the reconfiguration of Floormaster’s banking arrangements to exclude Ms Futcher as a director. This enabled Mr Norkett’s access to vital bank accounts and financial systems.
The transition the couple had to make to honour the financial agreement would eventually contribute to Ms Futcher making an unfair dismissal claim. Trade suppliers needed to be informed of Ms Futcher’s changed status. And Mr Norkett needed access to various passwords essential for business operations. Mr Norkett also needed to be trained in using the computer system. All these tasks required the couple to work together closely.
However, key to this unfair dismissal case is that this complex transition was taking place amidst a turbulent personal backdrop. Ms Futcher was feeling the emotional turmoil of her marriage breakup. While at the same time, Mr Norkett was shacking up with his new partner. The transition was also complicated by the fact that Mr Norkett was not computer literate. His main area of expertise was laying tiles.
Ms Futcher is dismissed by ex-husband
The ex-couple could only keep up this working arrangement for less than a month, however. The crucial turning point in this unfair dismissal case occurred on 2 May 2023, when Scott Norkett dismissed Ms Futcher. In email to her, Mr Norkett outlined that she had breached the binding financial agreement. And that the dismissal was effective at 5pm that day. Ms Futcher was paid four week’s salary in lieu of notice and her accrued annual leave.
In the email and in his defence against the unfair dismissal claim, Mr Norkett outlined the many reasons why he decided to dismiss his ex-wife. He argued to the Fair Work Commission that in the preceding two weeks, Ms Futcher had repeatedly refused to cooperate with work-related tasks.
Husband said ex-wife was “abusive” in unfair dismissal claim
He alleged that his ex-wife “demonstrated abusive behaviours (e.g. non-compliance, raising voice after being advised to be civil).” He also claimed that she withheld vital information and provided limited access to crucial passwords. Mr Norkett claimed that his ex-wife resisted transferring the Bendigo Bank app, necessitating a labourious reestablishment of banking arrangements. Mr Norkett stated that his ex-wife “was very rarely at work, when she did turn up she always left early.” And that she had “raised her voice after being advised to be civil.”
In contrast, Ms Futcher vehemently denied all the allegations made by her ex-husband. In her unfair dismissal claim she contended to the Fair Work Commission that she acted professionally. And that she had postponed discussing work-related matters until the designated day agreed upon. She explained her refusal to share a password as a measure to maintain professionalism. She claimed that she did this as Mr Norkett’s new partner was present during the call.
Fair Work Commission rules on the unfair dismissal case
The Fair Work Commission, after careful deliberation, found that Mr Norkett had a valid reason to dismiss Ms Futcher. It found that Ms Futcher “did not at all times comply with lawful and reasonable directions” given to her by her ex-husband. Importantly, it recognised the irrevocable damage to the relationship caused by the marital breakdown, rendering their collaboration in a small business untenable.
The Fair Work Commission stated that “it is clear that [Ms Futcher] was understandably upset that Norkett had left her” for his new partner. It was also acknowledged that Ms Futcher felt “as though he had been taken advantage of” by the binding financial agreement. The Fair Work Commission also accepted that the wife “would not assist with various work-related tasks, by saying such things as ‘not my problem’ and ‘I am not going to do that.’”
“It is altogether unsurprising that [they] were not able to work together in a cooperative manner. Their relationship had broken down and it was untenable for them to continue working together in a small business,” the Fair Work Commission said.
Procedural fairness denial outweighed by wife’s conduct
Under the Fair Work Act 2009, an employer is required to inform a worker of the reasons for their dismissal. That is, prior to making the decision to dismiss them. An employer must do this so that the worker has the chance to respond to the reasons. Critically, the Fair Work Commission acknowledged that Mr Norkett had failed to do this. It was accepted that the first time he told her about the reasons for her dismissal was in the email in which he also dismissed her.
The Fair Work Commission acknowledged that Mr Norkett had previously told his ex-wife to “stop her behaviours or the arrangement with her working in the Floormaster business would stop.” But this was found to not be sufficient notification of the reasons for her dismissal. And therefore it was found that Mr Norkett did not give his ex-wife the chance to respond to the reasons prior to dismissing her.
The Fair Work Commission therefore found that Ms Futcher “was not afforded procedural fairness in the process that led to the termination of her employment.” It acknowledged that she had “made a valuable contribution to the business over a significant period of time, and the dismissal caused her “financial harm”. However, this was “outweighed by the reasons for the dismissal.” Consequently, the Fair Work Commission dismissed Ms Futcher’s claim of unfair dismissal.
Another unfair dismissal case that stemmed from a tumultuous marriage breakdown is Maria Ranchod v Dog and Bone Holdings Pty Ltd T/A Dog & Bone [2021]. This time, the unfair dismissal claim was ruled in favour of the wife. And the Fair Work Commission forced the jilted ex-husband to pay her a whopping $27,000 in compensation.
The saga began in 2012 when a husband and wife together founded a company specialising in phone cases and electronic gadgets. At the core of this dispute lies the question of whether the wife was genuinely an employee or co-founder. In his defence of the unfair dismissal claim, the husband vehemently contested the wife’s assertion of co-founding the business. As evidence to back that up, he provided an employment contract to the Fair Work Commission. This was dated 2016, suggesting his ex-wife’s employment commenced only then.
Wife tells different story in unfair dismissal claim
In response to her husband’s claim, the wife countered by providing the Fair Work Commission with her own employment contract. This was signed by her husband and indicated that he too began working for the company in 2016. The wife contended that she was the first employee of the company. Also, that their employment contracts were formalised when they sought investment to expand the business.
The Fair Work Commission accepted that the couple had initiated their business venture in 2012. However, it found that their contracts of employment were executed only upon corporatisation with additional investors. This finding laid the foundation for a more intricate examination of the wife’s role within the company.
In his defence against the unfair dismissal claim, the husband attempted to diminish the wife’s role in the business. He argued to the Fair Work Commission that her involvement was limited due to her responsibilities as a stay-at-home mother. The husband said that she occasionally assisted with wholesale operations. However, he maintained that she did not play a significant role in the business’s founding or operation.
Wife argues unfair dismissal case to the Fair Work Commission
In her unfair dismissal claim, the wife presented a compelling case to the Fair Work Commission. She argued that her responsibilities encompassed a diverse array of tasks. This included marketing, business planning, customer service, product development, product testing, order packing and content creation. She also cited her appearance on a television program in 2014.
During this appearance, the wife discussed the business’ product line. She claimed that this television appearance was used extensively in the business’s promotional and instructional videos on YouTube. The Fair Work Commission sided with the wife with respect to her contributions to the business. It recognised that she brought substantial value. And the Fair Work Commission rejected the husband’s arguments that aimed to undermine her role.
The turning point in this contentious unfair dismissal case was the disintegration of the husband and wife’s marriage. As their personal relationship fell apart, the husband notified the wife in June 2020 that he wanted to make her redundant. However, the wife argued to the Fair Work Commission that her redundancy was a mere guise. And that her husband’s real motive was the breakdown of their marriage.
Five months later, when the business relocated to new premises, the wife was denied access, further exacerbating the acrimony. The husband’s threats of legal warfare and outsourcing the wife’s responsibilities on platforms like Upwork underscored the bitter nature of their dispute.
Dismissal amidst a marriage breakdown: Was it a genuine redundancy?
In January 2021, the husband informed the wife that he planned to replace her with a friend. Then in March 2021, the couple had a heated argument. This resulted in the husband dismissing his wife, formally notifying her of her redundancy. It was at this point that she lodged an unfair dismissal claim with the Fair Work Commission. The wife argued that her dismissal lacked genuineness since her tasks were still integral to the business. She argued to the Fair Work Commission the appointment of her replacement showed that it was not a genuine redundancy.
In unfair dismissal cases where the genuineness of redundancy is being challenge, the onus is placed on the employer to prove that it was genuine. They must demonstrate that the role is genuinely no longer required due to operational changes. They must also prove that redeployment of the employee was not feasible.
In his defence of the unfair dismissal claim, the husband outlined to the Fair Work Commission the reasons why he felt the redundancy was genuine. He claimed that the company was experiencing financial trouble. He also said that much of his wife’s role was being outsourced.
However, these arguments did not pass muster with the Fair Work Commission. It found that the husband failed to provide sufficient evidence for the company’s cash flow problems. Nor evidence to support that his wife’s duties were being outsourced. The Fair Work Commission found that the husband’s reasons for making his wife redundant were not genuine.
Unfair dismissal was motivated by marriage breakdown
Ultimately, the Fair Work Commission ruled that the wife’s dismissal was not a genuine redundancy. It became evident that the chief executive, the husband, used the pandemic-induced downturn as a pretext to sack his estranged wife. The Fair Work Commission noted that had their marriage remained intact, the wife would have likely continued in a reduced role while the business sought recovery.
Furthermore, the Fair Work Commission ruled that there was no valid reason for the dismissal, highlighting the husband’s failure to explore redeployment options, inadequate consultation, and the wife’s unwarranted exclusion from the business premises.
The wife’s long-standing commitment and investment in the company, along with the absence of legitimate grounds for her dismissal, culminated in a verdict favouring her. The Fair Work Commission ordered the husband to compensate the wife with $27,068.65 (excluding tax and superannuation contributions).
If you have been unfairly dismissed, call us today
A Whole New Approach 9we are not lawyers) are Australia’s leading workplace mediators with over three decades’ experience helping workers via the Fair Work Commission. We can help you if you have experienced unfair dismissal or have had your rights violated by your employer.
Make sure to act fast, because you only have 21 days to from the date of your dismissal to file a claim with the Fair Work Commission. With our guidance, you can understand if you are eligible to make a claim and get the best result. We offer a no win, no fee service and a free initial consultation.
Contact A Whole New Approach today at 1800 333 666 for the support you need
