I MATERIAL FACTS

On the 19th of March 2024, the applicant Mr Justin Stanley Mullins, a 61-year-old manufacturing accountant at KAB Seating Pty Ltd, received a show cause letter from the company noting his suspension on full pay, and requesting his response to 16 performance and conduct allegations. These allegations addressed matters such as Mr Mullins’ attendance at work, management of employees, and notably, his 11-month delay in finalising financial statements for the 2022 KPMG Audit. In their letter, the KAB attributed this delay to ‘serious misconduct and/or gross negligence’,[1] on the part of Mr Mullins who allegedly ‘incorrectly blamed (mapping) issues for his non-performance’.[2]

Mullins had been hired by the company on the 29th of August 2022, earning a base salary of $115 500 per annum, notably coinciding with the period in which KAB transitioned from the AX4 to the D365 accounting system. Mullins responded to the 16 allegations through his legal representative on the 22nd of March 2024, clarifying that the mapping issues were legitimate having been identified by the external firm Findex,[3] and that the 11-month delay was a result of his cautious approach to fix these issues resulting from the company’s transition between accounting systems. Nonetheless, on April 12 2024, Mullins was dismissed without notice for the previously cited ‘serious misconduct and/or gross negligence’.[4] Mr Mullins responded to his termination letter on the 26th of April 2024, reiterating his disagreements with the allegations outlined in his show cause letter and stating his intention to lodge an unfair dismissal application.

Mullins, represented by Mr Diaz, claimed that his performance at work was to a reasonable standard and that his dismissal was an unfair dismissal, while KAB represented by Mr Ford claimed that Mr Mullins had engaged in ‘serious misconduct in his role as Company Accountant’ and that KAB had valid reason to dismiss Mr Mullins.[5]

II LEGAL ISSUES

The case raises the question of whether Mullins’ dismissal would be considered an unfair dismissal under Section 387 of the Fair Work Act (2009), for being harsh, unjust, or unreasonable. Addressing the issue would be based on the criterion of whether KAB had a valid reason to dismiss Mullins.

III THE COMMISSIONER'S DECISION

Commissioner Durham reached the decision that applicant Mullins’ dismissal was unfair, and that Mullins was to be awarded compensation of $45089.34, not being convinced by the KAB’s claims that there was a valid reason for dismissal. He rejected the KAB’s claim that Mullins had lied about mapping issues, finding that Mr Mullins ‘held an honest concern’ about account accuracy.[6] Commissioner Durham further justified his decision in noting how KAB did not follow their own performance management process, which stipulated that a formal written warning was to be provided to an employee if their employment is at risk, with Durham criticising how KAB had provided no written warning to Mr Mullins about his allegedly unsatisfactory performance, prior to the March 19 show cause letter.

IV IMPLICATIONS OF THE DECISION

The court’s decision stresses the necessity for employers to take care in drafting correct and accurate allegations in the show cause letters given to employees, such that the employee can meaningfully respond and resolve any issues.

V FOOTNOTES

[1] Mr Justin Stanley Mullins v KAB SEATING PTY. LTD [2025] FWC 371 [2] (‘Mullins v KAB’).

[2] Ibid [36].

[3] Ibid [76].

[4] Ibid [2].

[5] Gadens Performance and conduct dismissals - recent cases and lessons for employers.

[6] Mullins v KAB (n 1), [93].