Qld boutique firm retrenches junior accountants while in $200k tax debt

Lake ruled the dismissal a genuine redundancy after he accepted Drew Stephenson’s evidence that it could not operationally afford to employ its junior accountants due to operational requirements.

Sweeney commenced employment as a junior accountant with Drew Stephenson in Hervey Bay, Queensland, on 31 July 2024.

In June 2025, four employees, including three fee earners, resigned. The company director also resigned shortly after, overall causing a 25 per cent loss in company turnover.

According to bank statements for May, June, July, and August 2025, the company had minimal cash and owed over $200,000 in taxes to the ATO.

In light of their financial situation, the company decided to cease trading to avoid insolvency, cancelling its ABN, GST registration, and PAYG withholding registration.

“Once the former director left, the business no longer had a public practice licence and no longer had someone capable of managing the practice,” Lake said.

On 16 July 2025, Sweeney’s colleague, also a junior accountant, sent an email to their employer stating that they were uncomfortable opening the office to the public, as they were concerned for their safety after dealing with aggressive and abusive clients day by day.

“The client’s frustration stems from us [sic] not being able to advise them who is dealing with their work and the lack of being able to provide an approximate timeline for completion. Many of these clients have had their work with us for quite some time, and this work has not been completed as yet,” the email said.

On 8 August 2025, Sweeney and his colleague’s employment was terminated. Sweeney was terminated verbally at about 8am and was emailed a termination letter shortly after.

His employer gave evidence that Sweeney’s job could no longer be performed as the company did not have fee earners to supervise his accounting duties.

In his application, Sweeney submitted that prior to his termination, he took on additional administrative duties to cover for the lack of a receptionist.

Sweeney submitted that the company advertised a receptionist role, indicating that his job was still required as he was “walking double duty”.

However, Lake determined that although some of his tasks were of a receptionist nature, he was still employed as a junior accountant.

Drew Stephenson alleged that Sweeney “walked out” and did not work out his notice period after he was terminated.

The commission determined that Drew Stephenson no longer required the junior accountant role to be performed by anyone due to changes in operational requirements, significant debts, and little financial assets in the company account.

In addition, the deputy president said it would not be reasonable to redeploy the Sweeney due to a lack of fee-earning staff and that he did not have the qualifications to perform accounting work unsupervised.

Upon consideration of all evidence, Lake ruled that the dismissal was a genuine redundancy and dismissed the application, upholding Sweeney’s termination.

The case citation: Joel Sweeney v Drew Stephenson Pty Ltd (U2025/13391).