Fair Work finds flawed investigation in McFadden v Mars case that led to Unfair Dismissal

A recent Fair Work Unfair Dismissal decision, in which Hall Payne Lawyers represented the successful employee, is an important reminder that employers cannot ignore broader workplace failures, focus on a single employee, and then rely on a flawed investigation to justify dismissal.

In McFadden v Mars Australia Pty Ltd [2026] FWC 2772, Deputy President Slevin ordered the reinstatement of a Mars Australia Team Leader with more than 23 years of unblemished service after finding her dismissal was harsh, unjust and unreasonable. The decision also highlights why employees should seek advice from an Unfair Dismissal lawyer if they believe the process leading to their dismissal was flawed.

A workplace incident led to dismissal

The case arose after a forklift punctured a container of peppermint mints at Mars Australia’s Asquith manufacturing facility, creating a potential food safety risk.

The Team Leader and a Quality and Food Safety Specialist agreed on how the affected product should be managed, and a direction was provided to staff in accordance with that agreed position.

However, what ultimately occurred differed from the agreed position. Other employees handled the product differently, records entered into Mars’ electronic systems did not accurately reflect what had occurred, and several steps required under the company’s own food safety procedures were either completed incorrectly or not completed at all.

Following an internal investigation, Mars concluded the Team Leader was responsible for those failures and dismissed her for misconduct.

The workplace investigation focused too narrowly

Deputy President Slevin accepted that the food safety process had not been followed correctly. However, the Commission found that responsibility for those failures did not rest with one person.

When the employee responded to the allegations, she identified numerous procedural failures attributable to other employees. Rather than expanding the investigation to examine those issues, the employer continued to focus almost exclusively on whether she should be disciplined. That became the critical issue in the case.

The Commission accepted that workplace procedures had broken down. What it rejected was Mars’ decision to attribute those failures to one employee without properly investigating the conduct of everyone else involved. The decision also found there was an element of prejudgment in the disciplinary process.

Before the investigation had concluded, and before the employee’s detailed response had been properly considered, Mars had already offered her the opportunity to resign. Those findings significantly undermined the fairness of the disciplinary process.

Procedural fairness in workplace investigations calls for more than a meeting

Many employers assume that procedural fairness in workplace investigations simply requires notifying an employee of allegations, giving them an opportunity to respond, and allowing a support person to attend meetings. Once the employee raised credible evidence that broader procedural failures had contributed to the incident, the investigation should have followed that evidence wherever it led. Instead, the Commission found the investigation remained fixed on one employee. That ultimately proved fatal to the employer’s case.

The decision is a useful reminder for employees that an Unfair Dismissal after a flawed workplace investigation may be challengeable where key evidence was ignored, the process was prejudged, or the employer failed to properly test what happened.

There was no valid reason for dismissal

Under the Fair Work Act, an employer must have a valid reason before dismissing an employee. In this instance, Deputy President Slevin found that a valid reason was lacking. Summarising his conclusions, Deputy President Slevin said, in relation to the dismissal:

“It was unreasonable because there was no valid reason as Ms McFadden’s conduct did not justify dismissal. It was unjust because Ms McFadden was targeted for breaches of a workplace procedure in circumstances where there was substantial non-compliance with the procedure by others, and those breaches were not investigated. There was also an element of prejudgment in investigation.”

Employers cannot rely on an investigation that fails to properly test competing explanations or fairly assess the conduct of everyone involved. They also show how an Unfair Dismissal claim can turn not only on what happened at work but also on whether the employer conducted a fair and balanced investigation before deciding to dismiss.

Long service and personal circumstances mattered

The Commission also placed significant weight on Ms McFadden’s personal circumstances when assessing whether dismissal was a proportionate response. She had devoted 23 years of service to Mars and its predecessor without any prior disciplinary issues or performance concerns, giving her a reasonable expectation of ongoing employment.

Deputy President Slevin also accepted that the dismissal would have profound consequences for her and her family. Her working arrangements had enabled her to care for her two sons, including one with special needs, while remaining close to their schools. Losing her employment meant she faced the prospect of either relocating her family to pursue comparable work or accepting lower-paid local employment.

The financial consequences were also substantial, with the loss of her defined benefit superannuation scheme projected to reduce her retirement benefits by more than $300,000.

Taken together, these factors reinforced the Commission’s conclusion that dismissal was a harsh and disproportionate response in the circumstances.

Reinstatement, lost pay and continuity of service were ordered

The Fair Work Commission ordered Mars to reinstate Ms McFadden to the position she held immediately before her dismissal. The Commission also ordered that her employment be treated as continuous from the date of dismissal to the date of reinstatement and that Mars pay lost remuneration, with the exact amount to be agreed or determined.

This outcome is significant because reinstatement is not ordered in every Unfair Dismissal case. In this matter, the Commission did not accept Mars’ argument that trust and confidence had been irreparably damaged.

The decision is a reminder of employee dismissal rights and how the process can be found unfair where there is no valid reason, the investigation is flawed, or the consequences of dismissal are harsh in the circumstances.

Can you claim Unfair Dismissal after a biased investigation?

A dismissal may be considered unfair where the employer had already:

• formed a view before properly considering your response;
• failed to investigate evidence that supported your position;
• treated you differently from others involved, or
• relied on allegations that were not made out.

This does not mean every flawed investigation automatically leads to a successful Unfair Dismissal claim. However, Unfair Dismissal because of procedural unfairness can be a strong issue where the process affected the outcome or denied the employee a genuine opportunity to respond.

Getting employment legal advice early can help you understand whether the dismissal may have been harsh, unjust or unreasonable.

Hall Payne Lawyers can help

Hall Payne Lawyers was proud to represent Ms McFadden in her successful Unfair Dismissal application before the Fair Work Commission. If you’ve been dismissed following a workplace investigation, do not assume the process was fair simply because meetings were held or allegations were put to you.

Our experienced employment lawyers regularly represent employees in Unfair Dismissal claims across Australia and can advise you about your rights, your options and the steps available to challenge an Unfair Dismissal. Whether you need an employment lawyer Australia-wide, assistance with employment law in Brisbane, employment law in Sydney, or employment law in Melbourne, Hall Payne Lawyers can help you understand your next steps.

If you need legal advice for Unfair Dismissal claims, speak to an Unfair Dismissal lawyer as soon as possible. Strict time limits apply when lodging a Fair Work Unfair Dismissal application.