Australian employers have a duty to ensure, as far as is reasonably practicable, the health and safety of their workers, including their psychological wellbeing.
As awareness of this duty has increased in recent years, so too has the volume of claims related to psychiatric injuries suffered in the workplace including workers’ compensation as well as common law claims for negligence and even breach of contract.
In response, employers have faced increasing pressure to promptly and proactively address any risks to staff wellbeing, including those arising from workplace bullying. However, employers should exercise caution and avoid hastily dismissing employees solely based on a perceived threat to workplace health and safety.
An important reminder of this is the recent decision of Donato v Queensland Venue Co Pty Ltd [2026] FWC 362, where an employer summarily dismissed an employee based on the perception that she had engaged in workplace bullying toward a colleague.
The employer failed to undertake a proper investigation before hastily concluding that the employee’s conduct constituted serious misconduct warranting summary dismissal. Consequently, the employer was ordered to pay compensation to the employee for unfair dismissal.
Donato v Queensland Venue Co Pty Ltd [2026] FWC 362
The employer operated numerous restaurant venues across Australia.
In early July 2025, the employee arranged ducks around a hand-drawn pentagram on a manager’s desk, describing it as ‘ducks engaged in a summoning ritual to summon more ducks’ (Incident).
The employee had planned to place a larger toy duck in the middle of the circle the next day as a ‘product’ of the summoning spell. The employee maintained that this was a light-hearted act intended as a joke.
Contrary to the employee’s expectations, the manager did not take the rubber ducky summoning circle lightly. Upon discovering the arrangement, she sent a photograph to the employer and lodged a formal complaint. She expressed distress, stating that the pentagram was a ‘symbol evoking the devil’ and that she was terrified of such ritualistic actions due to ‘past experiences’.
The employer acknowledged the complainant’s distress and became concerned about her mental wellbeing and potential health and safety risks. An investigation into the complaint was promptly initiated, which identified the employee as the person responsible for the rubber duck ritual.
Disciplinary action
The employer formed the view that the employee had breached the Equal Opportunity, Diversity & Inclusion Policy (Policy), which listed practical jokes, among other behaviours, as examples of workplace bullying.
The employer issued an allegation letter to the employee in respect of her involvement in the Incident and invited her to attend a meeting and submit written responses to the allegations.
Shortly before the meeting, the employee sent a message to the manager apologising if the prank had caused any distress. However, during the meeting, the employer expressed the view that the apology was not genuine.
During the meeting, the employer asserted that the employee had made the manager the butt of a joke and referenced the manager’s history of mental health issues. When the employee attempted to respond that she was unaware of this history, the employer cut her off from speaking.
The employee stated that she had no intention of offending or harming the manager and asked the employer to consider her previously clean record and commitment to building strong working relationships. She also requested a mediation and an opportunity to formally apologise to the manager, but the employer rejected this request.
Shortly after the meeting, the employer issued a letter terminating the employee’s employment for serious misconduct. This occurred only six days after the Incident.
The employee lodged an unfair dismissal application with the Fair Work Commission (Commission), seeking compensation from the employer.
Unfair dismissal
A termination of employment is considered unfair if it is harsh, unjust or unreasonable. An unfair dismissal claim involves assessing various factors, including whether there was a valid reason for the dismissal and whether the employee was notified of that reason and given an opportunity to respond.
In considering whether there was a valid reason for the employee’s termination, the Commission was required to decide whether it was satisfied that the employee had engaged in workplace bullying toward the manager.
Workplace bullying occurs when a person or group repeatedly behaves unreasonably towards another worker, creating a risk to health and safety.
FWC decision
The employer argued that it had an obligation to ensure a safe system of work and that the employee’s bullying posed a serious risk to the manager’s wellbeing.
However, the Commission did not agree that the employee’s conduct constituted workplace bullying. The employee had also placed rubber ducks in other locations around the workplace prior to the Incident. Further, although good intentions will not prevent conduct from amounting to bullying, the Commission considered that a reasonable person would not have anticipated that the manager would have reacted in the way that she did.
The Commission also noted evidence that the manager had since gotten a pentagram tattoo and had worked at one of the employer’s venues on a night when a band known for featuring pentagram imagery was performing. This was inconsistent with the claimed adverse impact of the employee’s prank as asserted by the manager and employer.
Even if the conduct had breached the employer’s Policy, the Commission determined that its severity did not warrant termination of employment, and that there was no valid reason for dismissal. Considering the employee’s previously unblemished record, the Commission held that summary dismissal was harsh in the circumstances.
The Commission concluded that the employer had unfairly dismissed the employee ordered the employer to pay compensation of $8,405.76.
Conclusion
This case demonstrates the importance undertaking a thorough investigative process and carefully weighing all the circumstances surrounding an incident, especially when it may lead to disciplinary action.
Employers should also exercise caution when fast-tracking disciplinary procedures solely because a complaint involves conduct that triggers the employer’s health and safety obligations. These obligations do not override the employer’s other responsibilities, including managing discipline fairly, reasonably and without harshness.
If you have questions about workplace health and safety or the management of employees, please contact a member of our workplace relations and safety team.
