Valid Reason Isn’t Enough: What SC Hydro’s Unfair Dismissal Loss Teaches SME Employers

Here’s an uncomfortable truth for any business owner who’s ever dismissed someone for breaking the rules: having a valid reason to sack someone doesn’t mean the dismissal was fair. A recent Fair Work Commission decision proves it, and it’s worth ten minutes of your time.

SC Hydro dismissed a long-serving fitter for breaching safety procedure. The Commission agreed the breach happened and agreed it was a valid reason for dismissal. SC Hydro still lost. The dismissal was found harsh and unreasonable, and the business is now waiting to find out how much compensation it owes.

If you run a business where safety, conduct or performance issues come up, this case is a good warning shot. Not because the breach wasn’t real. Because the process around the decision fell apart.

What actually happened?

Albertus Neethling worked as a Mechanical Fitter and Leading Hand on the Snowy 2.0 project for SC Hydro. He’d been there over three years with a clean record. In June 2025, he and a colleague inspected a section of pipework without applying the full isolation procedure required by the site’s permit system. They’d assessed the job as low risk, used a workaround, and reported back once it was done. No one was hurt. Nothing was damaged.

SC Hydro investigated, stood him down, and eventually dismissed him seven months later. Their case for dismissal rested on two things: he’d breached safety procedure, and his internal safety report labelled it a “reckless violation” and a “wilful violation” of policy.

The Commission agreed the procedure applied and that Neethling should have followed it. That gave SC Hydro a valid reason to dismiss. Game over, right?

No. Because a valid reason is only one part of the fairness test, and SC Hydro fell over on the rest of it.

Why did SC Hydro lose if the breach was real?

Three things sank the case, and every one of them is fixable if you know to look out for it.

Lesson 1: You can’t call it deliberate without putting it to the employee

SC Hydro’s internal reports branded Neethling’s conduct a “reckless” and “wilful violation.” That framing was central to the decision to dismiss rather than warn him. But nobody ever told Neethling that’s how his conduct was being characterised, and nobody gave him a chance to respond to it.

The Commission found his conduct wasn’t deliberate at all. He’d assessed the task as low risk (correctly, as it turned out), used a workaround he genuinely believed was compliant, and had no history of cutting corners. If SC Hydro had put the “wilful violation” allegation to him directly, he may well have talked them out of it.

The takeaway: if your reason for dismissing someone rests on how you’re characterising their state of mind, deliberate, reckless, negligent, you need to say that to their face and let them respond to it specifically. A general “you breached procedure” letter doesn’t cover it.

Lesson 2: An apology that gets missed is an apology that costs you

Neethling apologised in writing during the investigation. The person who recommended his dismissal told the Commission under oath that no apology had been given. The Commission checked the file and found she was wrong. That single oversight was enough to tip the fairness assessment against the business.

If someone gives you a mitigating factor, an apology, an explanation, a clean record, it has to actually make it into the decision. Not just sit in a file somewhere. Whoever signs off on a termination needs to have read everything, not just the investigation summary.

Lesson 3: Five months of silence will always look bad

SC Hydro recommended dismissal in July 2025. It didn’t happen until January 2026. In between, the employee was stood down on pay, repeatedly asked for updates, and told his mental health and finances were suffering. The Commission called the delay “grossly excessive” and said no amount of staff turnover explained it.

Slow processes don’t just create legal risk. They create a paper trail of your own making that shows exactly how the delay affected the person you’re disciplining. If you’ve made a decision, act on it. If you can’t act on it yet, communicate regularly and say why.

What should you take away from this if you’re an SME employer?

This case isn’t really about pipework or Bluecard training or Snowy Hydro. It’s about the gap between “we were right to be upset” and “we ran a fair process.” Those are two different tests, and the Fair Work Commission will always run both.

• Before you dismiss, write down exactly why. If any part of that reasoning involves the person’s intent (deliberate, reckless, dishonest) that has to be put to them directly, not just implied in an investigation report.
• Read the whole response before you sign off on termination. Not the summary. The whole thing.
• Always ask: is there a lesser option? A warning, retraining, a final warning with conditions. The Commission wants to see that dismissal wasn’t the only option considered.
• Move at a reasonable pace. If you can’t, tell the employee what’s happening and when they’ll hear back.

One founder we worked with had a similar situation: a safety breach with no injury, a long-serving employee, and pressure from the team to “make an example” of it. We helped them run a process that separated the emotion from the decision, documented every step, and landed on a final warning instead of dismissal. Eighteen months on, no repeat incidents and no claim.  That’s the difference a properly run process makes.  You can enforce your standards and still get it wrong on how you get there.

If you’re dealing with a safety breach, a conduct issue, or any dismissal that feels straightforward on the surface, get it checked before you act. A phone call before the decision is a lot cheaper than a Fair Work claim after it.

FAQs: Valid reason and unfair dismissal

Can an employer still lose an unfair dismissal case if there was a valid reason to dismiss?

Yes. A valid reason is only one of several factors the Fair Work Commission weighs under section 387 of the Fair Work Act. Process failures, such as not giving the employee a chance to respond to specific allegations or not considering a lesser penalty, can still make the dismissal harsh, unjust or unreasonable.

What is a valid reason for dismissal under the Fair Work Act?

A valid reason must be sound, defensible and well founded, not capricious, fanciful or based on prejudice. Breaching a clear safety policy or procedure will usually meet this bar, but meeting it doesn’t guarantee the dismissal itself will be found fair.

Do I have to tell an employee if I think their conduct was deliberate rather than accidental?

Yes, if that distinction is part of your reason for dismissing them rather than issuing a warning. The employee needs a genuine opportunity to respond to the specific characterisation of their conduct, not just to the fact that a breach occurred.

How long can I take to action a dismissal after deciding on it?

There’s no fixed timeframe in the Fair Work Act, but unreasonable delay can count against you. The Commission has previously criticised employers for delays measured in months, particularly where the employee was stood down and left in limbo without updates.

What should I do before dismissing an employee for a safety breach?

Confirm the policy clearly applied to the task, put every allegation (including any claim the conduct was deliberate) to the employee in writing, properly consider their response including any apology or mitigating factors, and document why lesser options such as a warning weren’t appropriate.

Case reference: Albertus Neethling v SC Hydro Pty Ltd [2026] FWC 2411, Deputy President Wright, 14 July 2026.