Fair Work Commission Rules in Favour of Employee Unfairly Dismissed for Alleged Embezzlement

Thursday 18 April 2019 @ 1.31 p.m. | Industrial Law | Legal Research

In the recent case of Chan v Advanced Health Invest Pty Ltd T/A Mastery Dental Clinic [2019] FWC 2315 (8 April 2019), the Fair Work Commission (the “Commission”) has ruled in favour of a Dental Practice Manager who was unfairly dismissed for allegedly embezzling money from the dental practice.

In its initial response to the application, Advanced Health Invest Pty Ltd t/a Mastery Dental Clinic (the “Respondent”) objected to the application on the basis that it was a small business employer and had complied with the Small Business Fair Dismissal Code (Cth).


Ms Mei Kuen Chan (the “Applicant”), who was a Practice Manager for a dental company with surgeries located in Hurstville and Hornsby NSW, was dismissed on 21 September 2018 (but was stood down in June 2018) over allegations she stole thousands of dollars from the dental business, including more than $7,000 in cash from its bank account, and took almost a year of maternity leave “without authorisation”.

Bonus Payment and Maternity Leave Entitlements

Ms Chan claimed she had a verbal agreement with one of the resident dentists that she would receive a $200 weekly bonus for every $12,000 in revenue the clinic generated – this payment was in addition to her commission. The business denied such an arrangement existed and claimed it was owed more than $33,000 in lost money and “falsely claimed” paycheques, all based on allegations denied by the dismissed Practice Manager.

The dismissed worker said she was not paid while on maternity leave and was told she would be given her paid paternity leave in a lump sum after she returned to work as well, she had been given no training or guidance on how to prepare the books and had developed her own method over four years, prompting the employer to comment “if you do not have the relevant knowledge, you do not meet the job requirements”.

Human Resources Director Magazine reports the employer allegedly called the report a “forgery” then asked the worker to explain the $24,000 allegedly unaccounted for in the clinic’s cash record book.

In his judgment, Jonathan Hamberger SDP noted at [para 19]:

“… None of the witnesses was particularly convincing when giving their oral evidence. Dr Zhang and Mr Guan, in particular, made assertions that were clearly contradicted either by documentary evidence or indeed, in some cases, their own written witness statements …”

Findings of the Commission

It was noted that in June 2017, the Applicant informed the Respondent she was pregnant and due to complications with the pregnancy, took quite a lot of time off work between 17 June 2017 and 16 August 2017. There is no evidence that the Respondent objected to the Applicant taking this time off.

In handing down his findings, Hamberger expressed concern regarding the quality of evidence put forward by the Respondents, especially with regard to payment of both maternity leave and bonus entitlements, he noted at [para 52]:

“… In particular, I accept that the applicant had an understanding with the respondent that she would receive both commission and a performance bonus, and that these would continue to be paid while she was on maternity leave … Both the commission and the bonus were included in the monthly cash reports that the applicant gave to the Dr Zhang and Mr Guan. They were also included in the report that the applicant prepared on 11 June 2018.”

Citing evidence the worker kept her employer informed of her leave requirements and other practices, Hamberger concluded at [para 53]:

“I do not consider there is sufficient evidence to sustain any of the allegations the respondent made against the applicant … I am not persuaded that there are any significant, unexplained discrepancies in the cash accounts the applicant had prepared.”

And at [paras 56-57] of the judgment, he commented:

“Finally, I am satisfied that any money the applicant took from the respondent’s cash receipts was money that she was authorised to receive … Given these findings, I am satisfied that there was no valid reason for the applicant’s dismissal.

Contractors or Employees?

According to SmartCompany, the employer submitted it had 14 employees at the time of the September 2018 dismissal, which would have classified it as a small business. However, there was also a list of dentists on the books who the clinic claimed were sub-contractors, and thus not employees.

The business provided copies of purported contractor agreements with its dentists, although Hamberger noted the evidence provided were only “a very small part” of each agreement, he also doubted the dentists were genuine contractors and not employers, citing evidence given by one of the dentists in a witness statement where she described herself as an “employee”.

The business was deemed to have more than 15 employees and did not qualify for small-business protection.

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