2 min read

Inflexibility leaves employer exposed to damages payment

The Case

Khutson v Chesson Pty Ltd T/A Pay Per Click


Chesson Pty Ltd trading as Pay Per Click (Chesson) tried to change Ms Khutson’s hours of work from 9am to 5pm with a 30-minute lunch break, to 9am-5.30pm with a 60 minute lunch break.

While Ms Khutson indicated she was willing to change her hours, she advised that as she had prepaid Pilates classes on Mondays and Wednesdays and due to that she needed to leave work at 5:15pm on those days. To compensate, she would shorten her lunch break by 15 minutes to allow for the fact that she was leaving at 5.15 rather than 5.30pm, or alternatively she would work later on the other days.

Chesson refused Ms Khutson’s request. Chesson advised Ms Khutson that if she did not sign the revised contract, that they would “need to find staff that [would] support the business as it grows and continually changes”.

Ms Khutson refused to sign the contract and Chesson terminated her employment. Ms Chesson lodged an unfair dismissal application in the Fair Work Commission (FWC).

The Verdict

The FWC found the dismissal was unfair because:

  • there was no satisfactory explanation for such a rigid approach when the employee was willing to be flexible with her hours;
  • there was no consideration to allowing this arrangement for the prepaid Pilates period;
  • there was no sound or defensible reason for the dismissal;
  • Chesson refused to pay Ms Khutson’s personal leave during the notice period, despite her providing a medical certificate (the FWC said this meant the dismissal was a summary dismissal); and
  • notifying the employee of her termination by email – an act it described as “unnecessarily callous” given the seriousness of the subject matter and despite the employer being a small business which permitted some degree of informality.

The FWC ordered Chesson pay Ms Khutson compensation of $22,882.00.

The Lessons

If you wish to implement changes in the workplace that will affect an employee’s hours of work, you must ensure:

  1. there is a legitimate business reason for the changes;
  2. you carefully consider any genuine issues employees raise about the effect of the changes on them including considering any alternatives they put forward to the proposals you have made, and consider alternatives of your own; and
  3. you are flexible where the business can legitimately be so.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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