Flawed termination process renders dismissal for racist remarks unfair

Most employers would assume that racist remarks in the workplace would be a clear-cut case for summary dismissal, and in many instances, they would be right. However, a recent decision of the Fair Work Commission (Commission) makes clear that even the most obvious forms of misconduct will not excuse a failure to follow a procedurally fair process.

In the case of Peter Jones v Exclusive Contracting (WA) Pty Ltd [2026] FWC 253, the Commission conceded that the decision to dismiss a worker for making racist remarks in a toolbox meeting was valid, but that a failure to notify the employee of his reason for dismissal effectively denied him of his entitlement to procedural fairness, rendering the dismissal unfair.

Key facts

Exclusive Contracting (WA) Pty Ltd (Company), which described itself as a “proudly multi-cultural” workplace, summarily dismissed a ceiling fixer in July 2025 following comments he made during a site-wide toolbox meeting. At the meeting, the worker stated that Chinese people were “taking our jobs”, “taking over the industry”, and “taking opportunities away from apprentices”. Several employees present at the meeting were of Chinese heritage and found the comments to be “unacceptable” and “severely racially motivated”.

The following day, the Company’s general manager terminated the worker’s employment without prior notice of the reasons for dismissal and without providing him with the opportunity to respond. Under section 387 of the Fair Work Act 2009 (Fair Work Act), the Commission will consider these factors in determining whether dismissal of the employee was harsh, unjust or unreasonable.

The worker subsequently lodged an unfair dismissal application, arguing that he did not intend his comments to be offensive, that he did not single out any individual, and that his remarks did not amount to racial vilification.

Key findings

Commissioner Jessica Rogers rejected the worker’s attempt to downplay the seriousness of the comments. She accepted evidence from other employees who attended the meeting and described the remarks as “unacceptable”, “severely racially motivated”, and as making them “feel quite uncomfortable”.

Commissioner Rogers found it was “not in dispute” that the worker singled out a group of people based on race in front of colleagues who belonged to that race. She concluded that the comments carried an implicit message that people of Chinese heritage should not have the same employment opportunities as others.

Commissioner Rogers went on to state that it was “implicit in his comments that people of Chinese heritage should not have the same opportunities as other races solely based on their race, which demonstrates an inherent prejudice.” Importantly, the Commission found that the worker’s intent was irrelevant. Regardless of whether he meant to offend, the remarks were racist in nature and, when made in a site-wide meeting in a multicultural workplace, constituted a valid reason for dismissal.

However, when assessing whether the dismissal was harsh, unjust or unreasonable under section 387 of the Fair Work Act, the Commission identified a critical flaw in the Company’s process. The Company failed to notify the worker of the reason for dismissal prior to terminating his employment, as required by section 387(b). As a result, the worker was denied an opportunity to respond to the allegations before the decision was made.

“While I respect [the Company’s] strong stance regarding the consequences for [the worker] due to the racial nature of the comments made, [he] is entitled to procedural fairness and was not afforded it,” Commissioner Rogers said.

In determining a suitable remedy for the employee, the Commission found that reinstatement would be inappropriate in circumstances where the employee was already set to retire, his project had been completed at this point and the reason for his dismissal was undisputedly valid. The Commission argued that if procedural fairness had been provided, the worker would likely have remained employed for only a further three weeks. After deducting one week’s pay to reflect the worker’s contribution to the dismissal, compensation of $4,059.44 was awarded.

Key takeaways for employers

In particular, employers should note:

• Even where the conduct clearly justifies dismissal – including racist remarks – that alone will not guarantee a dismissal to be fair. The Commission will assess both substantive fairness (valid reason) and procedural fairness (fair process), and employers must satisfy both.
• Employees must be clearly informed of the precise reason their employment was terminated.
• Employees must be afforded procedural fairness, which includes being given a meaningful opportunity to respond to any allegations before a decision to terminate is made. It may also include explaining the allegations clearly, providing relevant details of the allegations and properly considering the employee’s responses.
• Even in cases of serious misconduct, employers are not exempt from the procedural fairness requirements imposed by the Fair Work Act.

Finally, this case highlights how failure to comply with procedural requirements under the Fair Work Act can have tangible financial consequences for an employer. Although the compensation awarded was modest, it was entirely avoidable and arose despite the Commission finding that the dismissal itself was substantively justified.

Want to know more?

If you require further assistance on conducting a workplace investigation or disputing an unfair dismissal claim, please contact NRA Legal on 1800 572 679 for a confidential conversation.

Peter Jones v Exclusive Contracting (WA) Pty Ltd [2026] FWC 253