A South Australian tradie who said Chinese workers were “taking our jobs” has been awarded an unfair dismissal payout for his employer’s procedural fairness lapses. The Fair Work Commission ruled the worker’s racist remarks were a valid reason for his summary termination. However, it was ultimately ruled unfair because the employer made the decision without giving him the chance to respond to the reason.
This unfair dismissal SA case – Peter Jones v Exclusive Contracting (WA) Pty Ltd [2026] – is a prime example of a worker being clearly racist, but getting off the hook because of the employer’s error. In this article, we’ll look at the events of this case. We’ll also look at another Fair Work case where the racism was not so obvious, involving a worker who claimed his colleagues were racist for complaining about his body odour.
Tradie’s racist comments ends in $4K unfair dismissal payout
South Australian-based Peter Jones started working as a ceiling fixer for commercial wall and ceiling subcontracting business Exclusive Contracting in 2023. The company described itself as “proudly multi-cultural,” employing and contracting workers from Taiwan, Uzbekistan, Russia, New Zealand, England, Ireland and several other countries. Mr. Jones had been employed for just over two years at the time the incident occurred that led to his termination of employment..
‘Taking our jobs’: Worker makes racist comments about Chinese people
That incident took place on 24 July 2025 during a site-wide toolbox meeting. The meeting was attended by more than 21 employees, including several workers of Chinese heritage. During a discussion regarding upcoming work and low morale within the industry, Mr. Jones made several remarks concerning Chinese labour. Colleagues present at the meeting reported that the comments included assertions that Chinese workers were “taking our jobs”, “taking over the industry” and “taking opportunities away from apprentices.”
Mr. Jones had also said that “in 10 years’ time, it will be a Chinese industry” and that Exclusive Contracting employees were “worried about our job security.” Numerous staff members who were present at the meeting described Mr. Jones’ language as “unacceptable” and “severely racially motivated.” They also noted that it made them “feel quite uncomfortable.” One witness alleged that a specific derogatory term was used. On 25 July 2025, the day following the meeting, Exclusive Contracting proceeded with a summary termination of employment without prior warning. It cited the fact that Mr. Jones had made “inappropriate and racially offensive remarks.”
Unfair dismissal SA: Argued comments weren’t racist and didn’t target anyone
Following his termination of employment, Mr. Jones lodged a Fair Work unfair dismissal claim. He argued that he did not intend for the comments to be offensive. He also claimed that he did not single out an individual and did not racially vilify anyone. Mr. Jones further stated that his comments were made in the context of employees being “worried about our job security.” Mr. Jones also “vehemently denied” that he had used an ethnic slur, as was attested by one witness.
Mr. Jones also alleged he was denied procedural fairness. He said that he was never informed of the specific reasons for his dismissal before the decision was finalised and was therefore denied the opportunity to respond. Mr. Jones also argued that his personal circumstances made the termination of employment particularly harsh. He told the Commission that he intended to retire in December 2025 and was only seeking employment for a five-month period. He attributed his subsequent difficulties in finding alternative work to a combination of his age and a general lack of work in the industry.
Mr. Jones sought compensation equivalent to five months’ wages. He argued that there was no valid reason for the termination of employment and that he had been denied a fair process.
Employer argued comments were racist, procedural issues immaterial
In response to Mr. Jones’ Fair Work unfair dismissal claim, Exclusive Contracting argued that his termination of employment was reasonable. This was because his remarks were “racially offensive” and were made in front of other employees. In regard to Mr. Jones’ claim that he was denied procedural fairness, Exclusive Contracting argued that as a medium-sized contractor without dedicated human resource management specialists, their internal processes were reflective of their operational reality.
It maintained that even if a different process had been followed, the result would have been the same and Mr. Jones would still have faced termination of employment. The company effectively argued that the gravity of Mr. Jones’ conduct superseded the need for procedural steps
Fair Work: Comments were racist and valid reason for summary termination
Mr. Jones’s Fair Work unfair dismissal claim was heard by the Fair Work Commission in January 2026. It noted that his attitude fluctuated throughout proceedings. He had accepted that his comments could have been perceived as racist and had shown remorse. But he then defended his comments and denied they were racist. The Commission first examined whether the comments gave Exclusive Contracting a valid reason for his termination of employment. It found that the comments made by Mr. Jones showed an “inherent prejudice” and were “racist,” even if he had not intended to offend anyone.
The Commission concluded that they were based on a belief that people of Chinese heritage should not have the same opportunities as others. However, the Commission did not accept that Mr. Jones used the ethnic slur one witness attested to hearing, noting that no other staff heard it. Ultimately, it concluded that Mr. Jones singled out a particular ethnic group in front of colleagues belonging to that race. The fact that he had made the comments during a site-wide meeting in a multicultural workplace constituted a valid reason for termination of employment.
Unfair dismissal SA: Employer stuffed up termination process, paid the price
Despite finding a valid reason for termination of employment, the Fair Work Commission found that Exclusive Contracting had denied Mr. Jones procedural fairness. It said that he was not notified of the reason for his termination of employment before the decision was made. Consequently, he was not given an opportunity to respond to the reason. The Commission concluded that while it respected Exclusive Contracting’s “strong stance” on Mr. Jones’ racist comments, he was still entitled to procedural fairness.
Because of these procedural failures, the termination of employment was ruled harsh and unfair. The Commissioner noted that the company’s lack of human resources expertise “does not relieve” it of legal obligations. In determining a remedy, the Commission found that reinstatement was inappropriate as the project had wound down and Mr. Jones intended to retire in December 2025. It therefore ordered Exclusive Contracting to pay him $4,059.44 in compensation.
The Commission estimated Mr. Jones would have remained employed for only three more weeks had a fair process been followed. It had also reduced his compensation as he had contributed to Exclusive Contracting’s decision to sack him.
Ethiopian worker perceives bad odour criticism as racism, walks off job
This story concerns the unfair dismissal TAS case Mr. Gedamu Mersha Yigzaw v LSA Services Pty Ltd [2026]. Hobart-based Gedamu Mersha Yigzaw began working for marine evacuation systems manufacturer LSA Services in March 2023. He was of Ethiopian heritage. The events preceding his termination of employment began with a workplace incident on 8 July 2025. While Mr. Yigzaw and a colleague, Mr. Teklu, were welding a raft floor, their supervisor directed them to complete the task within a three-hour window. His reasoning was to free up equipment for other duties.
Another colleague, Mr. Haig, soon got involved. Mr. Yigzaw alleged that Mr. Haig spoke in an “aggressive and hostile manner” and physically stepped between the workers. Following this interaction, Mr. Yigzaw walked to his locker, collected his belongings and stated “I’m leaving.” He then left the worksite without seeking permission. Mr. Yigzaw did not report for his scheduled shifts over the next three days nor make contact with LSA Services.
While he claimed to have phoned a doctor on 9 July 2025, he did not actually attend a consultation until 14 July 2025 where he was given a medical certificate for his three missed shifts. On that same day, Mr. Yigzaw went to the workplace at 10:30 am (well past his start time) and was not dressed for work. He met with the general manager to discuss the previous week’s events.
Unfair dismissal TAS: Argued he’d been racially targeted, fired
Following that meeting, Mr. Yigzaw lodged a Fair Work unfair dismissal claim. He argued that the general manager had fired him because he told him “I don’t have a job for you” during their meeting. Mr. Yigzaw sought a remedy for what he viewed as an unfair termination of employment. He alleged that he had been subjected to unfair treatment and “racism” throughout his employment due to his Ethiopian heritage.
He specifically recalled an instance where management raised concerns regarding his body odour, which he believed was racially motivated. Mr. Yigzaw claimed that another worker had told him, “people said you smell or you’re smelly.”
Employer said bad odour warning not racially motivated
In response to the Fair Work unfair dismissal claim, LSA Services said that Mr. Yigzaw had left the workplace mid-shift and failed to make contact for several days. The company argued that he had not been dismissed but had voluntarily walked off the job and never came back. LSA Services denied any allegations of racism, a hostile work environment or workplace bullying. The general manager testified that while he received complaints about Mr. Yigzaw’s personal hygiene, he handled the matter “sensitively.” He noted that it was not an “unusual occurrence” in a manufacturing setting.
The general manager explained that he had asked Mr. Teklu to speak to Mr. Yigzaw about his odour in an effort to deal with it discreetly. LSA Services further explained that a separation certificate citing “end of season or contract” was a clerical error by the office manager, and did not reflect the true nature of the departure.
Fair Work: Criticism of BO problem fair game
Mr. Yigzaw’s Fair Work unfair dismissal claim was heard by the Fair Work Commission in February 2026. After reviewing security footage descriptions and witness testimonies, the Commission found that Mr. Haig had remained “really calm the whole time.” It concluded that he was not “offensive” or “aggressive” in any way during the initial July incident.
Regarding the allegations of racism and discrimination, the Commission noted that Mr. Yigzaw “genuinely believes” he was subjected to racism. However, it said that he was unable to provide “any specific example” of racism he had been subjected to. The Commission found no indication that comments regarding body odour were “racially motivated” or intended to humiliate him. It was noted that the general manager had cause to speak to other employees about personal hygiene in the past.
Unfair dismissal TAS: Worker left job on own volition
The Fair Work Commission next examined if Mr. Yigzaw had actually been dismissed. It noted that for a Fair Work unfair dismissal claim to succeed, the termination of employment must be at the employer’s initiative. Or, it must constitute a constructive termination of employment where the employee was forced to resign.
The Commission found that his behaviour was of a person “who decided he no longer wished to work at LSA.” It was noted that when Mr. Yigzaw returned on 14 July 2025, he arrived late, was not dressed for duties and did not actually ask for work. The Commission did not accept his claim that the general manager had said there was no job for him. It described the manager as “forthright” and “reasonable.”
The Commission found Mr. Yigzaw attended the meeting “to voice his upset” over how he perceived he had been treated and to collect documentation, rather than resume his role. Ultimately, the Commission concluded Mr. Yigzaw’s employment ended because he left LSA Services “of his own volition.” As the jurisdictional requirement of a dismissal was not met, his Fair Work claim was therefore rejected.
Read more: Incompetence or Inexperience? Worker Dismissed for $200K Gold Loss
Protect your rights at work
Acting quickly and getting the right advice can make all the difference. Whether you’ve been unfairly dismissed, forced to resign or subjected to unlawful treatment at work, you may have rights under the Fair Work Act.
A Whole New Approach (AWNA) assists employees across Australia with unfair dismissal, general protections, redundancy disputes, sexual harassment and other workplace claims. We can help you get compensation and hold your employer to account.
Unfair dismissal claims must be lodged within 21 days of your employment ending, so time is critical. For a free, confidential initial consultation, contact us today at 1300 766 700 today.
