Co-owner of firm loses sacking fight
THE co-owner of a Townsville supplement store has been sacked after a review found nearly $10,000 of suspected company money had been spent on car detailing, flights and a holiday with his girlfriend.
Phillip Smith tried to sue his former employer, Fit Empire and Wellness, for unfair dismissal but the Fair Work Commission found he was fired on reasonable grounds.
According to the decision handed down by the commission, the Townsville man, who formerly owned 25 per cent of the Currajong business, did not bother to tell his fellow shareholders he used company money for multiple purchases between July 2017 and February last year.
Mr Smith was confronted by his co-owners when the business was failing and an external review revealed he racked up at least $9791.76 in purchases using the business account.
He did not provide any reasoning for these purchases and was sacked two days later.
The commission stated the investigation revealed he used company cash for medical bills, flights and legal fees for a court case where he was convicted of bashing an employee of a rival supplement store in 2017.
Records also show that Mr Smith, who had full access to the company’s bank accounts, spent $4299 on an advertisement package that also included a holiday to Orpheus Island, which he enjoyed with his girlfriend.
The co-owners also recorded more than $40,000 was missing from business accounts after their bookkeeper raised red flags about discrepancies four times across two years.
They also suspected Mr Smith sold stock outside of the business for his own venture, Sports Plus Performance Coaching, and pocketed the cash.
He denied both allegations and the commission made no finding as to the accuracy of these allegations.
Mr Smith, who was now running his business out of
Alphalete Fitness, did not give an excuse for some of the missing cash or purchases, saying as a shareholder he could authorise expenditure for his benefit and at his discretion. He claimed he paid some of the money back in dividends.
The money troubles took a significant toll on the coowners, who reported they were left in personal and financial hardship and even considered selling shares of the business.
Mr Smith was sacked, but launched an appeal with the commission claiming he was unfairly dismissed.
An investigation found he made excuses for several purchases, including that he paid for flights and car hire expenses with company cash because other people had done similar.
He also blamed their missing money on incorrect transactions, saying staff could have made errors while cashing out each day.
Since he was sacked, the co-owners claimed the monthly cash banking amounts had doubled for the sports supplement business.
The commission found that Mr Smith’s dismissal was not harsh or unreasonable, and the application was thrown out.