Adam Johnson v Toonibal Pty Limited [2026] FWC 2774

1 Fair Work Act 2009 s.394 - Application for unfair dismissal remedy Adam Johnson v Toonibal Pty Limited (U2026/1223) COMMISSIONER CRAWFORD NEWCASTLE, 23 JULY 2026 Application for relief from unfair dismissal – business not a small business due to employees of associated entity – job no longer required but not a genuine redundancy due to failure to comply with consultation obligations – dismissal unfair – compensation ordered Background [1] Toonibal Pty Limited (Toonibal) operates a small retail business and café named Nanna’s Homewares and Antiques at Gloucester in the Hunter region of New South Wales. Adam Johnson was employed by Toonibal as a full-time cook and Store Manager prior to being dismissed on 15 January 2026. Mr Johnson was employed by Toonibal since around 2018. Mr Johnson argued he was always a full-time employee. Toonibal argued Mr Johnson was a casual employee from around 2018 to 27 June 2021 and then commenced full-time employment on 28 June 2021. There is also a dispute about why Mr Johnson was dismissed. Toonibal argued the café business is not profitable and that Mr Johnson’s job became redundant. Mr Johnson argued he was dismissed because he started performing work at the local golf club. Mr Johnson filed an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (FW Act) on 4 February 2026. Toonibal raised two jurisdictional objections to the application. Toonibal argued that Mr Johnson’s dismissal was a case of “genuine redundancy”. Toonibal also that it is a “small business employer” and it complied with the Small Business Fair Dismissal Code (SBFDC). This decision concerns Toonibal’s jurisdictional objections and, if required, the merits of Mr Johnson’s application and the appropriate remedy. [2] I conducted a hearing via video on 6 July 2026. Mr Johnson relied on his own evidence in support of his application. Toonibal relied on evidence from Julie Sleap (Owner and Director). The parties represented themselves and led quite a minimal amount of evidence. That has made it difficult to resolve the various issues that arise for determination with the application. Initial matters [3] There is no dispute that Mr Johnson’s application was filed within 21 days of when the dismissal took effect. There is also no dispute that Mr Johnson had completed the applicable [2026] FWC 2774 DECISION -- 1 of 7 -- [2026] FWC 2774 2 minimum employment period. Mr Johnson had at least four-and-a-half years of continuous full- time employment with Toonibal. There is also no dispute that the Restaurant Industry Award 2020 (Award) covered Mr Johnson’s employment with Toonibal and his earnings were below the high-income threshold. Mr Johnson was a person protected from unfair dismissal. [4] Toonibal argued it was a “small business employer” within the meaning of s.23 of the FW Act and that Mr Johnson’s dismissal was consistent with the SBFDC. I accept Toonibal only had five employees when Mr Johnson was dismissed on 15 January 2026. However, s.23(3) of the FW Act states: “For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.” The dictionary in s.12 of the FW Act states “associated entity has the meaning given by section 50AAA of the Corporations Act 2001.” [5] Ms Sleap eventually accepted during the hearing that she also owns the C & J Sheetmetal Fabrications business which has 25 employees. I am satisfied this business is an associated entity of Toonibal and that its employees must be included in the required calculation. That means Toonibal and its associated entities had around 30 employees when Mr Johnson was dismissed. [6] I find Toonibal was not a “small business employer” within the meaning of s.23 of the FW Act and that the SBFDC is not relevant. [7] I accept Ms Sleap’s evidence that Mr Johnson was dismissed because Toonibal no longer required his job to be performed by anyone because of changes in its operational requirements. Ms Sleap provided evidence that the café is not profitable, that Mr Johnson has not been replaced, and that the café is operating for fewer hours and with a minimal menu since Mr Johnson’s dismissal. Mr Johnson did not really contest these points. I am also satisfied that it was not reasonable for Mr Johnson to be redeployed within the Toonibal business due to the decline in its operational requirements. There is no evidence that Mr Johnson could have been redeployed within Ms Sleap’s sheet-metal fabrications business. That means two of the three elements in the definition of a “genuine redundancy” are satisfied. [8] However, I consider Toonibal did not comply with the consultation obligations in clause 32 of the Award in relation to the decision to make Mr Johnson’s position redundant. Ms Sleap provided evidence she met with Mr Johnson without notice in the afternoon on 15 January 2026 and informed Mr Johnson that his role was redundant. Toonibal failed to provide Mr Johnson with written notice of the operational changes and failed to discuss the changes with Mr Johnson. Toonibal did not comply with any of the consultation obligations in the Award. [9] I find Mr Johnson’s dismissal was not a case of genuine redundancy within the meaning of s.389 of the FW Act because Toonibal did not comply with the consultation obligations in the Award. [10] I have considered the required initial matters. My findings mean I must proceed to consider the merits of Mr Johnson’s unfair dismissal application. -- 2 of 7 -- [2026] FWC 2774 3 Harsh, unjust, or unreasonable [11] Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account: (a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); (b) whether the person was notified of that reason; (c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; (d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; (e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; (f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; (g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (h) any other matters that the FWC considers relevant. [12] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.1 Valid reason related to capacity or conduct [13] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”2 and should not be “capricious, fanciful, spiteful or prejudiced.”3 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.4 [14] Although Mr Johnson argued he was dismissed because he had started working at the local golf club, I am not satisfied there is sufficient evidence in support of this position. Mr Johnson’s final payslip referred to a payment for redundancy and Ms Sleap and her accountant provided evidence that redundancies were required for the business to remain viable. I find that the reason for Mr Johnson’s dismissal was because his position was made redundant. [15] Mr Johnson was not dismissed due to his capacity or conduct. Mr Johnson was dismissed because operational changes meant that Toonibal no longer required the full-time role of cook and Store Manager. I consider this is a neutral factor. 1 Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69]. 2 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373. 3 Ibid. 4 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685. -- 3 of 7 -- [2026] FWC 2774 4 Notification of the reason for dismissal [16] Notification of a reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,5 and in explicit6 and plain and clear terms.7 [17] I am not satisfied that Mr Johnson was notified of the reason for his dismissal before the final decision was made to terminate his employment. The decision to terminate Mr Johnson’s employment was communicated by Ms Sleap without notice during an informal meering on 15 January 2026. I find this factor weighs in favour of finding Mr Johnson’s dismissal was unjust and unreasonable. Opportunity to respond to the reason [18] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.8 [19] The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.9 Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.10 [20] I am not satisfied that Mr Johnson was provided with an opportunity to respond to the reason for his dismissal. Ms Sleap informed Mr Johnson he was being dismissed at an informal meeting held without notice on 15 January 2026. I find this factor weighs in favour of finding Mr Johnson’s dismissal was unjust and unreasonable. Opportunity to have a support person present to assist at discussions relating to the dismissal [21] Ms Sleap communicated Mr Johnson’s dismissal at an informal meeting held without notice on 15 January 2026. The lack of notice meant that Toonibal denied Mr Johnson any opportunity to have a support person present. I find this factor weighs in favour of finding Mr Johnson’s dismissal was unjust and unreasonable. Warnings about unsatisfactory performance before the dismissal [22] Mr Johnson was not dismissed due to unsatisfactory performance. I find this is a neutral factor. 5 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151. 6 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998). 7 Ibid. 8 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75]. 9 RMIT v Asher (2010) 194 IR 1, 14-15. 10 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7. -- 4 of 7 -- [2026] FWC 2774 5 To what degree would the size of Toonibal’s enterprise be likely to impact on the procedures followed in effecting the dismissal [23] Toonibal is operating a small enterprise. Toonibal does not fall within the definition of a “small business employer” because it has an associated entity that employs 25 people. Nevertheless, I consider Toonibal’s small size would be likely to impact on the procedures it followed in effecting Mr Johnson’s dismissal. I consider this lessens the severity of the procedural fairness deficiencies. To what degree would the absence of dedicated human resource management specialists or expertise in Toonibal’s enterprise be likely to impact on the procedures followed in effecting the dismissal [24] I find that a lack of dedicated human resource management specialists contributed to a significant degree to the defects in the procedures followed by Toonibal in effecting the dismissal. I consider this lessens the severity of the procedural fairness deficiencies. Other relevant matters [25] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. [26] Neither party referred to any other relevant matters. Conclusion [27] I have made findings in relation to each matter specified in s.387. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust, or unreasonable.11 [28] Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Mr Johnson was unjust and unreasonable because there was a severe lack of procedural fairness afforded by Toonibal. Mr Johnson had worked for the business since around 2018 and there is no dispute he was a hardworking and capable employee. Mr Johnson deserved more than being told he was being made redundant at an informal meeting held without notice on 15 January 2026. I have not identified any factors that weigh against finding that the dismissal was harsh, unjust, or unreasonable. [29] I find Mr Johnson was unfairly dismissed. Remedy [30] Mr Johnson does not seek reinstatement. I am satisfied reinstatement is inappropriate in this case. 11 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7]. -- 5 of 7 -- [2026] FWC 2774 6 [31] The evidence provided by the parties demonstrates that: • Mr Johnson did not lose remuneration from the dismissal because he took steps to mitigate his loss and found better-paying employment as a roofer within four weeks of being dismissed. Mr Johnson also performed work at the local golf club before and after his dismissal. • Mr Johnson had around 4.5 years of full-time service with Toonibal when he was dismissed on 15 January 2026. I accept Ms Sleap’s evidence that Mr Johnson was a casual employee from 2018 until 28 June 2021. Mr Johnson failed to lead evidence to establish he was not a casual employee during this period. • Mr Johnson was paid four weeks as a purported ex gratia redundancy payment when he was dismissed. • Given I have found Toonibal was not a “small business employer” when the employees of an associated entity are included, Mr Johnson should have received three weeks of wages in lieu of notice for termination pursuant to s.117 of the FW Act, and eight weeks of redundancy pay pursuant to s.119 of the FW Act. That is a total of 11 weeks’ pay. Mr Johnson only received four weeks' pay. • The viability of Toonibal’s enterprise is likely to be affected by a compensation order. Ms Sleap provided evidence that the business is not profitable and it may not trade in the foreseeable future. • Mr Johnson admitted to posting information about his dismissal on social media during the evening on 15 January 2026. I accept Ms Sleap’s evidence that this conduct triggered negative publicity for Toonibal and caused financial damage. • Mr Johnson was paid a salary of $65,000.00 per year or $1,250.00 per week from Toonibal. [32] After considering the factors identified in s.392 of the FW Act and the unique facts of this case, I consider it is appropriate to order that Toonibal makes a payment equivalent to five weeks of wages to Mr Johnson, plus superannuation. I will provide Toonibal with 28 days to make the payment, given its difficult financial position. -- 6 of 7 -- [2026] FWC 2774 7 Order [33] I order that Toonibal must pay the following amounts as compensation within 28 days of the date of this decision: • $6,250.00 gross to be paid directly to Mr Johnson. • $750.00 to be paid into Mr Johnson’s nominated superannuation fund. COMMISSIONER Appearances: Mr Johnson representing himself. Ms Sleap on behalf of Toonibal. Hearing: 2026. 6 July. Via video. Printed by authority of the Commonwealth Government Printer <PR812436> -- 7 of 7 --