ADIDEM PTY LTD v SUCKLING [2014] FWCFB 3611 Fair Work Commission (Full Bench) - Unfair dismissal — Working as contractor not a conflict of interest

This Full Bench decision from 30 June 2014 examines whether an employer can dismiss a worker for engaging in out-of-hours independent contracting where the contract of employment bars working for a competitor. The Body Shop terminated Ms Suckling, an administrative employee, after she refused to cease a side business as a PartyLite consultant.

The employer said PartyLite was a competitor and relied on a conflict-of-interest clause and implied duties of fidelity. The Full Bench refused permission to appeal, leaving in place the first-instance finding of unfair dismissal and an order for five months’ compensation. (Fair Work Commission)

What happened

• Ms Suckling worked in an administrative role supporting The Body Shop’s party-plan consultants. Separately, she entered an independent consultant agreement with PartyLite to sell candles in her own time. The Body Shop treated PartyLite as a marketplace competitor and directed her to end the consultancy; she declined and was summarily dismissed. (Fair Work Commission)

• The employment terms included a clause preventing employees from “working for” a competitor. The Commission accepted that while The Body Shop considered PartyLite a competitor, Ms Suckling was not “working for” PartyLite; she was running her own business under an agreement that was expressly not a contract for the performance of work for PartyLite. (Fair Work Commission)

ADIDEM PTY LTD v SUCKLING [2014] FWCFB 3611 Fair Work Commission (Full Bench) - Unfair dismissal — Working as contractor not a conflict of interest

What the Commission decided

• No breach of the conflict clause: Interpreting the clause according to its words, the Full Bench agreed with the approach that the prohibition on “working for” a competitor did not catch running one’s own independent business. On that footing, directing her to end the consultancy was unreasonable, and non-compliance with that direction could not supply a valid reason for dismissal. (Fair Work Commission)

• No breach of implied duties: Allegations about access to confidential information and the possibility of influencing consultants did not establish an actual conflict or conduct incompatible with the duty of fidelity. There was no proved misuse of information or diversion of custom. (Fair Work Commission)

• Unfair dismissal outcome stands: The first-instance decision found there was no valid reason for dismissal and ordered five months’ pay (stated as $20,084.68, less tax). The Full Bench refused permission to appeal, concluding the case turned on applying existing authority and the specific clause, and disclosed no appealable error.

Why this case matters

• Words matter in conflict clauses: A narrow prohibition on “working for” a competitor may not reach genuinely independent side businesses, especially where there is no actual competition in duties or misuse of information. Carefully drafted terms are decisive in how far an employer can regulate out-of-hours engagements. (Fair Work Commission)

• Independent contracting is not automatically a conflict: The Commission distinguished between an employee performing work for another entity and an employee running a separate business without infringing employment duties. The absence of evidence showing diversion, solicitation or misuse of confidential information was critical. (Fair Work Commission)

• Directions must be reasonable: Where the underlying clause does not prohibit the conduct, a direction to stop may be unreasonable. Failure to follow such a direction cannot, without more, supply a valid reason for dismissal. (Fair Work Commission)

• Outcome on compensation: With no valid reason and no misconduct deductions warranted, five months’ remuneration was upheld. The Full Bench saw no public interest in granting permission to appeal and dismissed the appeal. (Fair Work Commission)

Key takeaways in plain terms

• Having a second gig is not inherently a conflict. The question is whether the side activity falls within the actual words of any restraint and whether it conflicts with duties owed to the employer in practice. (Fair Work Commission)

• Evidence is everything. Generalised concerns about potential misuse of information or hypothetical influence will not substitute for proof of conduct incompatible with duty. (Fair Work Commission)

• Clarity in contracts counts. Where terms are narrow, they will be read narrowly; broader restraints must still be consistent with the law and will be tested against the facts. (Fair Work Commission)

Web search results

• Adidem Pty Ltd t/a The Body Shop v Suckling [2014] FWCFB 3611 (30 June 2014) – Fair Work CommissionAuthoritative decision. Summarises the facts, the construction of the conflict clause, the absence of breach of implied duties, and refusal of permission to appeal. (Fair Work Commission)

• Find decisions and orders – Fair Work CommissionFWC’s official portal to locate decisions and orders by citation, party name, or date. Useful for verifying primary sources. (Fair Work Commission)

• Nothing wrong with a bit on the side… – LexologySecondary commentary discussing the implications of the case for drafting conflict-of-interest clauses. (lexology.com)