Law Firm Referred to Fair Work Ombudsman for Unauthorised Deductions from Employee Wages

In the recent decision of Renee Passmore v The Trustee for The CBC Lawyers Unit Trust, Sandra Clive [2025] FWC 575 (the Decision) the Fair Work Commission (the FWC) has stated that it will refer a law firm to the Fair Work Ombudsman for unauthorised deductions from employee wages in breach of the Legal Services Award 2020 (the Award).

Overview of the Decision

Ms. Passmore (the Applicant) commenced employment with The Trustee for The CBC Lawyers Unit Trust t/as CBC Lawyers (the First Respondent) on 20 May 2024. Following a deterioration in the working relationship due to alleged workplace bullying, the Applicant resigned from her employment on 1 November 2024. The Applicant’s resignation email stated that pursuant to her contractual notice period, her final day of employment with the First Respondent would be 29 November 2024 (the Resignation Email). The Applicant was on personal leave at the time of the Resignation Email, from 28 October 2024 to 4 November in accordance with a medical certificate provided to the First Respondent on 28 October 2024.

On the afternoon of 4 November 2024, the Applicant attended the offices of the First Respondent. During this visit, the Applicant spoke with an employee of the First Respondent whilst returning company property, being the Applicant’s keys to the office, remote control to the office carpark, a work laptop and charger and two company polo shirts worn on ‘casual Fridays’. The Applicant made a statement to the employee using words to the effect of “good luck with everything, you’re going to f**king need it”. This employee took the Applicant’s actions to be evidence of the Applicant’s intention to not return to work despite her contractual notice period and relayed this to the principals of the firm, being Mr. Clive (the Second Respondent) and Ms. Clive (the First Respondent).

Later the same afternoon, however, following the expiry of her medical certificate, the Applicant sent the First and Second Respondent a second updated medical certificate stating that she remained unfit to return to work until 18 November 2024.

On 5 November 2024, the Applicant contacted the Second Respondent as she had not received her fortnightly pay. The Second Respondent responded to the Applicant by letter on 12 November 2024 (the Letter). The Letter stated that the Respondent had taken the Applicant’s return of company property to constitute a repudiation of her employment contract (the Alleged Repudiation), that the Alleged Repudiation had been accepted by the Respondent, and that the Respondent’s employment had therefore been terminated on 4 November 2024.

On 18 November 2024, the Applicant responded to the Letter by email stating that by providing ongoing medical certificates she had not repudiated her employment contract and therefore remained employed by the Respondent. Later this day, the Applicant filed a General Protections Application Involving Dismissal in the FWC (the Application).

Key Issues

The First Respondent raised a jurisdictional objection in response to the Application, alleging the Applicant had not been dismissed. In response, the Applicant argued the Resignation Email was consistent with her contractual obligations, and that the Letter terminated the Applicant’s employment during her contractual notice period.

In the alternative, the Applicant argued she had been forced to resign due to the conduct of the First Respondent, citing alleged workplace bullying, the First Respondent’s failure to pay wages and an unlawful “salary sacrifice” as the reasons for resignation.

Outcome

In determining whether the Applicant had been ‘dismissed’ in accordance with section 386(1) of the Fair Work Act 2009 (Cth). Deputy President Lake of the FWC accepted the Applicant’s first argument, being that the Letter terminated the Applicant’s employment during her notice period.

In arriving at this conclusion, Deputy President Lake considered the Applicant’s alternative argument, being that she was forced to resign due to the conduct of the Respondent. Despite rejecting the Applicant’s argument, Deputy President Lake stated that the alleged unlawful deductions to the Applicant’s salary including a “salary sacrifice” for the Applicant’s car space and the deduction of 4-weeks’ pay from the Applicant following the Alleged Repudiation was in breach of the Legal Services Award 2020 and was “concerning, especially for employers who are legal practitioners”. Deputy President Lake stated that due to their seriousness, these matters were to be referred to the Fair Work Ombudsman.

Deputy President Lake also considered the Alleged Repudiation. Notably, it was found that whilst the Applicant’s return of company property may have amounted to repudiatory conduct, the Applicant’s later provision of a second medical certificate demonstrated her intention to still be bound by the terms of her employment contract.

Deputy President Lake was particularly scathing of the First and Second Respondent’s failure to contact the Applicant following the Alleged Repudiation, stating that “the whole matter could have been avoided if Mr and Mrs Clive had simply called or texted the Applicant to ask why she returned her property before the end of her notice period.”

Key Takeaways

The Decision emphasises the importance of compliance with any applicable modern award and that contraventions of the same, such as unlawful wage deductions, will not be treated lightly and may be subject to potential referral to the Fair Work Ombudsman. Furthermore, the Decision demonstrates the high threshold required for repudiation of an employment contract and the importance of objectively examining the employees’ conduct in determining whether they have evinced the requisite intention to no longer be bound by an employment contract.

If you have any questions about the Decision and what it could mean for you or your business, please do not hesitate to contact Nick Stevens, Josh Hoggett, Evelyn Rivera or Ayla Hutchison.