Employee accused of theft wins unfair dismissal claim

A garden and landscape supply employee won an unfair dismissal case after her employer terminated her for the alleged theft of 500 units of animal bedding.

Kathy Stabe, an employee at Jackson Garden and Landscape Supplies, applied for an unfair dismissal remedy after she was informed in a text from a work colleague and friend that she had been terminated for theft.

In a decision published on 12 December 2025, Fair Work Commission deputy president Nicholas Lake ordered Stabe’s employer to pay her compensation for lost wages.

Allegations of theft

Stabe commenced employment at Jackson Garden and Landscape Supplies on 4 January 2022. At the time of her termination on 26 May 2025, she was employed as an office manager.

The supply store stocked an animal bedding product made of sawdust called AniWood.

Carmen Jackson, the garden and landscape supply store’s owner and Stabe’s employer, submitted that she identified discrepancies in AniWood stock, which prompted her to carry out a stocktake for the product on 21 May 2025.

On the same day, Jackson gave evidence that she met and inquired with her staff, learning that Stabe instructed them to deliver around 10 bags of AniWood to her rental property.

The rental property, which contained 16 stables, was situated next door to the workplace. Jackson was the landlord for the property.

Unwin, also a personal friend of Stabe’s, was among the staff Jackson held a meeting with on 21 May 2025.

During the interaction, Jackson allegedly told Unwin that Stabe had just been terminated for theft, choosing to inform her first, as Unwin was Stabe’s personal friend.

Second-hand knowledge

Following the meeting, Unwin texted Stabe, who was overseas at the time, informing her of her termination. Stabe was not due to return to work for another week.

Unwin gave evidence that eight to 12 bags of AniWood were delivered to Stabe’s rental property while she was on holiday. Stabe paid for the stock upon her return to work.

Jackson also learnt from statements submitted to her from staff that Stabe would take about 10 bags of AniWood from the business, asking her co-workers to do the deliveries for her.

These statements also revealed that Stabe would take one hour in the morning or afternoon – usually around 3pm – to look after her horses.

$20k in missing stock

Jackson perused her accounting records on 26 May 2025, finding that 522 bags of AniWood were unaccounted for – stock worth approximately $18,875.15.

On the assumption that Stabe was responsible for this discrepancy, Jackson’s solicitor issued Stabe a letter of demand, seeking payment of $20,000.

The letter outlined that Jackson had “no wish to have any further dealings with [her]”, “will not agree to continue to employ [her]”, and kicked her out of the rental property.

The commission noted that the letter of demand was not in the form of a termination letter, despite it being framed as a severance agreement.

Basis for allegations ‘circumstantial’

The deputy president found that the basis for Jackson’s allegations was “circumstantial”.

At the hearing, the commission laid out the basis of Jackson’s allegations: “[Jackson] noted that [Stabe] trains horses and has a stables next door to the workplace. Ms Jackson noted that the AniWood is used for horse bedding. Ms Jackson obtained statements from employees in which they said that the applicant had bags of AniWood delivered to her stables.”

“Together with the discrepancies identified through the invoices and POS systems, it seemed to [Jackson] that the [Stabe] was responsible for the missing AniWood,” Lake said.

The commission said that these circumstances did not constitute a “reasonable basis for the belief that [Stabe] had committed serious misconduct”.

It was noted at the hearing that after being notified of her dismissal by a text, Stabe was not provided an opportunity to respond to the allegations.

Lake ultimately ruled the dismissal harsh, unjust, and unreasonable, ruling that there was no valid reason for dismissal.

The commission ordered Jackson to compensate Stabe for wages lost between 21 May 2025 and 1 August 2025 due to unfair dismissal – totalling $5,250.00 before tax plus superannuation, due within 21 days of the judgment.

In the case: Kathy Stabe v Jackson Garden And Landscape Supplies (U2025/9247).