The Fair Work Commission (‘Commission’) has ordered a $67,741.44 payout for an Employee, holding that she was unfairly dismissed when her employer terminated her while she was attending a mediation intake for allegedly failing to follow a lawful direction to attend mediation.

In this Employment Update we will discuss the matter of Leoni Seychelles v Yass Valley Aged Care Limited (‘Seychelles’), what it tells us about employer organised mediations, and the uses and limits of lawful directions.

Seychelles in a nutshell

The Employee was employed as a Senior Cook and reported to the Kitchen Manager, who she alleged had bullied and mistreated her. The Employee made complaints about the Manager’s conduct, one of which was substantiated by the Employer.

To rectify the relationship, the Employer asked the parties if they would participate in a mediation. The Manager agreed but the Employee did not, saying she believed it would be unsuccessful because the manager was confrontational and overpowering, and that she was scared it would make the situation worse. The follow on process included multiple exchanges of correspondence and an external investigation which recommended mediation, though with the caveat that the parties’ consent was required.

On 4 August 2025, the Employee received an email from a mediation service engaged by the Employer seeking to arrange a confidential pre-facilitated meeting as the first stage in the mediation process. After further exchanges, including a meeting with the Employer in which the Employee indicated that “[she didn’t] really have a choice”, the Employee attended a meeting with the mediator at 3:17pm on 27 August 2025. Believing that the process was confidential, she did not inform the Employer that the meeting had been organised.

At 3:46pm that day, while the Employee was still meeting with the mediators, the Employer dismissed her by email for (allegedly) failing to comply with a direction to engage in a facilitated conversation with the mediators. That afternoon, the Employee called the Employer to advise that she had just completed the first facilitated conversation. Despite this, the Employer did not reconsider the termination.

Lawful directions

An employee is bound to obey the lawful and reasonable directions of their employer. The principle behind this is well established, and was stated in the foundational 1938 High Court case of R v Darling Island Stevedoring and Lightridge:

“If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable.”

It is also “well established that a failure to follow a lawful and reasonable instruction is serious misconduct within the ordinary meaning of that phrase”. While employees enjoy many rights in Australia, the law recognises that employment relationships include a “fundamental feature of subordination”. As outlined by the QIRC, an employee who fails to comply with a lawful and reasonable direction “must expect that a consequence of that choice will, in all likelihood, be the termination of their employment.”

There are several qualifiers to a lawful direction:

1. There must be a direction.
2. The direction cannot be illegal.
3. The direction must be reasonable.

Each of these points has been the subject of extensive case law but, at a high level, an illegal direction would include a direction that would have the employee act in a way that contravenes a law or to undertake a dangerous activity that risks their health and safety.

As to reasonableness, what is reasonable will vary depending on the circumstances. It will take into account various factors such as seniority, skills, contracts, applicable Awards, and a multitude of other factors. Unreasonable directions might include a direction to act outside the agreed role and duties or that fail to consider the employee’s personal circumstances.

Lastly, and relevant to this article, a lawful direction should be a direction.

Lawful directions & mediation

On the question of direction, the Commission found that while the Employer “strongly encouraged, and even urged, [the Employee] to participate in mediation” there was “no direction to that effect”. Though it was not the only factor at play (note that the Employee did eventually engage in the mediation process), it highlights that lawful directions issued to employees should be clear and unequivocal in nature.

Interestingly, the Commission also noted that “In any event, mediation should be a voluntary process”, and that this view was “consistent with [the investigator’s] recommendation that mediation would be contingent on both [the Employee] and [the manager] agreeing to participate”.

Though little was said on the matter of the voluntary nature of mediations, it does suggest that the Commission may not accept (or may at least have difficulty accepting) that a direction to attend mediation constitutes a lawful direction for employment purposes. That being the case, employers should ensure that all relevant parties consent to a workplace mediation before proceeding further.

Employer takeaways

Employers should be aware that while they are entitled to issue lawful directions, procedural fairness is a must, and that directions must be clear, reasonable, and within the scope of employment.

Employers should also be careful to ensure that (in providing procedural fairness) they are responsive to any explanations put forward by their employee. To take Seychelles as an example, the termination was founded upon an alleged failure to attend mediation as directed. Putting aside for a moment the invalidity of the direction, recall that:

1. the Employee did in fact attend the first step of mediation on the day of termination and prior to the termination being communicated;
2. the Employee communicated this fact to the employer upon becoming aware of the termination; and
3. despite this information being provided, the employer did not revisit its termination decision.

In the circumstances, it is unsurprising that the Commission was quite critical, holding that “[t]he conduct for which Mrs Seychelles was dismissed simply did not occur” and that it was “not a valid reason for dismissal”.

Even if a valid direction were made to attend a mediation, the Employee could not be said to have breached it. That being the case, the justification for termination falls away. Accordingly, ignoring procedural fairness cost the aged care facility $67,741.44.

This is a clear reminder to employers to properly consider information provided by employees as opposed to simply continuing with a predetermined course of action.

If you have any questions about this Employment Update, or if you require assistance with a workplace investigation, please do not hesitate to reach out to our experienced employment law team.

Note: this matter is currently under appeal and, accordingly, this article may be updated at a later date. Despite the appeal, the principles outlined are in our view appropriate for guiding employers. There may be additional guidance points as a result of an appeal.