If You Sign It, You Own It: The CEO Who Never Read the Letters That Sacked His Financial Controller

A business sacked its financial controller for making an unauthorised $100,000 payment to the ATO.

There was one problem. The payment it accused her of making, on the date it said she made it, never happened.

In a decision handed down on 16 June 2026 ([2026] FWC 2230), the Fair Work Commission found the dismissal unfair and ordered more than $50,000 in compensation. The CEO admitted he hadn’t read or checked any of the letters sent to her. The Commission said his hands-off approach “borders on negligence”.

If you’re a founder or director who signs off on dismissals someone else has prepared, this one’s for you.

The short version What happened: An employee was dismissed for serious misconduct based on allegations nobody checked. One of them was simply wrong. The outcome: Unfair dismissal. $50,775.23 compensation plus $6,093.30 super, even after a 20% reduction for the employee’s own conduct. The lesson: Delegating the paperwork doesn’t delegate the risk. If your name is on the decision, check the facts.

What Actually Happened?

The employee had been the company’s financial controller since August 2022, reporting to the CEO and COO. She had never had a performance warning or been told her job was at risk.

In August 2025, the executives asked her to negotiate a payment plan with the ATO for a tax debt. She did. Repayments were $100,000 a month, with the first due on 15 September.

Not wanting to miss that first payment, she scheduled it manually for the early hours of 15 September. She didn’t get separate sign-off, believing the plan was already approved. Later that day, the ATO’s system automatically took a second $100,000.

She spotted the double payment the same day, investigated it and chased a refund. It came back on 9 October. The COO congratulated her on Slack.

For weeks, nothing suggested a problem.

Where Did It Go Wrong?

On 24 November, she received a letter alleging two counts of serious misconduct:

• Making a $100,000 payment to the ATO on 20 October 2025 without authorisation.
• Miscalculating tax liability, causing a $70,000 weekly variation.

She denied both at a meeting the next day. She was dismissed on 1 December.

When the case reached the Commission, the employer’s story fell apart:

• There was no evidence of any payment on 20 October. The only double payment was the September one, already refunded before the allegations were raised.
• The CEO accepted he hadn’t read or checked any of the letters the COO sent.
• The termination letter said she had accepted the allegations. The COO conceded in the proceedings that wasn’t what happened in the meeting.

The Commission found there was no valid reason for the dismissal. That was the main reason it was unfair.

Did the Employer Get Anything Right?

A couple of things, and they’re worth knowing.

The Commission accepted she had been given a chance to respond to the allegations. That counted in the employer’s favour, although it noted she wasn’t given a show cause opportunity afterwards to argue why she should keep her job.

It also accepted that she had secretly recorded the disciplinary meeting, which was misconduct, and that skipping explicit approval for the September payment breached policy. Those two things cut her compensation by 20%.

But behaviour around the edges couldn’t save a dismissal built on an allegation nobody had tested.

Why Does This Matter for Founders and Directors?

In most small and medium businesses, dismissals don’t start with the person who signs off. A manager raises it, someone drafts the letters, and the founder or CEO approves it because they trust their team.

That’s normal. But the Commission doesn’t care who drafted the letter. It looks at what the business did, and whether the decision-maker had a sound basis for it.

If the facts are wrong, the reason is wrong. If the reason is wrong, the dismissal is unfair. It really is that simple.

What Should You Check Before You Sign Off on a Dismissal?

You don’t need to redo the investigation yourself. You do need to ask the right questions before your name goes on it:

1. What exactly is the allegation? Specific dates, amounts and actions. Vague allegations are hard to prove and easy to get wrong.
2. What’s the evidence? Ask to see it. A bank record, an email, a roster. If the allegation is about a payment, look at the payment.
3. Has it been put to the employee properly? They should know what’s alleged and have a real chance to respond before any decision is made.
4. What did they say, and was it checked? If they deny it or offer an explanation, someone needs to test that explanation, not just note it.
5. Is the outcome proportionate? Think about their record, length of service, and whether a warning would be more appropriate.
6. Does the letter match what happened? Read it. Every word. If it says the employee admitted something, make sure they did.

 

What About Employees Secretly Recording Meetings?

It happens more than most employers think, and phones make it easy. In this case the Commission treated the secret recording as misconduct that reduced compensation.

Whether a secret recording is lawful depends on your state or territory, so the rules aren’t the same everywhere. The practical answer is to run every disciplinary meeting as if it’s being recorded. Because one day it will be.

What to do now Urgent: If you have a dismissal in progress, read every letter that’s gone out and check each allegation against the evidence before the next step. Urgent: Make sure the employee gets a genuine chance to respond, including after any findings are made. Lower priority: Set a simple sign-off rule. Nobody approves a dismissal without seeing the allegation, the evidence and the employee’s response.

Frequently Asked Questions

What makes a dismissal unfair in Australia?

The Fair Work Commission looks at whether there was a valid reason, whether the employee was told of the reason and given a chance to respond, and whether the dismissal was harsh, unjust or unreasonable overall. A dismissal based on facts that turn out to be wrong usually fails at the first step.

Can a CEO be blamed for a dismissal someone else handled?

The business is responsible for the dismissal, and the Commission will look at how the decision-maker reached it. In this case, the CEO’s failure to read the letters was heavily criticised.

Do I need to give a show cause letter before dismissing someone?

It isn’t a strict legal requirement in every case, but giving the employee a chance to respond to proposed findings and outcome is good practice. The Commission noted its absence here.

Can compensation be reduced because of the employee’s conduct?

Yes. The Commission can reduce compensation for misconduct that contributed to the dismissal. Here it was cut by 20%.

Is it misconduct for an employee to secretly record a meeting?

It can be. The Commission treated it as misconduct in this case. Whether it’s also unlawful depends on your state or territory’s surveillance laws.

About to Sign Off on a Dismissal?

HR Gurus will cut through the BS, check the allegations and the process with you, and make sure the decision will stand up if it’s challenged.

Book a call with HR Gurus today.

This article is general information only and is not legal advice. It is based on published decisions and reporting as at October 2026.