Page 14 Page 15 FOCUS HR | IR July Update 2026 FOCUS HR | IR July Update 2026 The Fair Work Commission found that a director’s aggressive and confrontational swearing forced an employee to resign, despite the employer arguing that such communication formed part of the workplace culture. What Happened An electrician claimed that the DMG Building & Electrical Services Pty Ltd’s director’s “abusive and bullying behaviour” made him “fear for his safety” and forced him to quit. After he resigned, he filed an adverse action claim, to which DMG objected, claiming that the electrician had resigned voluntarily. The electrician claimed that the director swore during a number of their conversations including when an issue arose when the worker visited a mosque to pray during work time, and a car reversed into his company van. In a subsequent email, the director told the electrician that even though they had never discussed or agreed to him undertaking prayer during working hours, he would be willing to accommodate it, provided the electrician made up the time. The director also raised issues with the electrician’s “below average” productivity. The electrician approached the director on November 25 to discuss the issues he raised in the email, and he covertly recorded their conversation. During the conversation, they discussed the electrician’s “work levels” and potential arrangements for him to take time off work to pray. The director told the electrician he appeared “self- absorbed” and it seemed “deceitful” for him to fail to disclose that he had been praying during work time. “[T]here’s two things I can’t f**ing tolerate its people who steal and people who lie,” he said. “I don’t want any negative nancies running around my company f**ing becoming toxic to other blokes. It festers. What we do with those people, we f**ing weed them out.“ The electrician resigned the following day and submitted a claim for a mental injury, which WorkCover later rejected. The director told the Commission that the audio recording showed that “at no stage was I disrespectful, unprofessional or aggressive” and “he addressed the situation in a normal manner that he would with any of his other employees”. The Decision Commissioner Allison concluded that the director’s “aggressive, confrontational” conduct towards the electrician, particularly during their November 25 conversation, forced him to resign. Why This Matters The case reinforces the growing focus on: • psychological safety • respectful communication • constructive dismissal principles • workplace culture arguments and • management behaviour during performance discussions. The decision highlights increasing scrutiny of management communication styles and demonstrates that “workplace culture” will not excuse aggressive conduct by managers or directors. ALI V DMG BUILDING & ELECTRICAL SERVICES PTY LTD [2025] FWC 1244 For years, the distinction between an employee and an independent contractor has remained one of the most heavily litigated issues in Australian employment law. While many disputes focus on the wording of contracts, Cropper v Energy Action (Australia) Pty Ltd (No 2) demonstrates that the practical reality of a working relationship can ultimately outweigh the label attached to it. What began as a relatively straightforward contractor arrangement evolved over almost 15 years into a relationship that looked, operated and functioned like employment. What Happened The dispute involved an IT specialist who first commenced working with Energy Action (Australia) Pty Ltd. Initially, the arrangement appeared relatively conventional. The worker operated as a sole trader and was engaged to assist with the development and management of the company’s database systems. He invoiced the business for his services and was paid an agreed hourly rate. At that stage, the relationship largely resembled an independent contracting arrangement. As the business grew, however, the nature of the relationship began to change. The IT specialist approached the company seeking to be placed on payroll, primarily to avoid the need to register for GST. Following that request, a number of administrative changes occurred that would later become highly significant in the proceedings. In 2006, the company started issuing the worker with pay slips, withholding tax from payments and making superannuation contributions on his behalf. By 2007 he was working exclusively for Energy Action. In 2008 he was provided with company business cards identifying him as the company’s Data Management and IT Manager. He later participated in annual performance reviews, assisted in recruiting and supervising other staff and became deeply embedded within the company’s day- to-day operations. Despite these developments, uncertainty regarding his status remained. Evidence before the Court revealed that company representatives continued to refer to him as an independent contractor. The issue came to a head in 2017 when the worker questioned why he had been excluded from an employee share plan despite previously being treated in various respects as though he were an employee. When he raised concerns, he was directed to seek advice from the FWC and the ATO. The matter remained unresolved until February 2020 when the company terminated the relationship. The company provided the worker with a transaction report setting out the amounts the company was proposing to pay him including what was described as an employment Why This Matters The decision highlights the significant risks associated with long-term contractor arrangements that gradually evolve into something much closer to employment. The case reinforces that contractual labels alone will not determine a worker’s status. Businesses should regularly review contractor arrangements, particularly where those relationships have existed for many years or where the worker has become deeply embedded within the organisation. CROPPER V ENERGY ACTION (AUSTRALIA) PTY LTD (NO 2) [2025] FCA 663 termination payment (ETP). When the worker refused to accept the proposed termination arrangement, the company issued a letter in which EAAPL’s chief executive explained “we will be terminating your engagement as a contractor” and that “as a gesture of good faith for your years of dedication as a contractor to the company, we will pay you the same amounts that we would pay to our permanent employees in this position, despite you being a contractor and therefore not having these entitlements”. The Decision After reviewing the evidence in detail, Justice Snaden concluded that the IT specialist had been an employee rather than an independent contractor from January 2006 onwards. The Court considered a range of factors that pointed towards employment, including • the worker’s exclusive service to the company, • the withholding of tax, • the payment of superannuation contributions, • his participation in performance reviews, • the managerial responsibilities he had assumed and • the extent to which he had become integrated into the business. The Court then considered the worker’s entitlement claims. Additional claims relating to annual leave, public holidays and personal leave resulted in an order to pay unpaid entitlements exceeding $100,000. The commissioner noted that the director appeared to care about his employees, demonstrated by his willingness to establish a flexible work arrangement that enabled the electrician to pray during the working day, and he likely did not intend for the electrician to resign. Commissioner Allison observed that the director runs a business in a blue-collar industry and “relies on close, direct relationships with his staff, speaking openly and frankly,” where “swearing is likely to be part of the everyday work culture”. But she found that the director’s language and behaviour during the November 25 meeting inappropriate and unacceptable “in any workplace”, pointing out that “An employer is in a position of power and [the director] needs to be aware that behaviour that might be acceptable with a friend or in another context, is not acceptable or appropriate with an employee.” She found the “probable result” of the director’s conduct in communicating feedback to the electrician and managing him, left him with “no effective or real choice but to resign”, and she dismissed the jurisdictional objection, allowing the adverse action claim to continue to conciliation.
View this content as a flipbook by clicking here.