An art and design school principal who said she was sacked by Instagram while on holiday in Europe is no longer pursuing almost $900,000 in compensation from her former employer.
Karen Webster had claimed she was dismissed by LCI Melbourne for taking paid annual leave during ‘the most important term of the year’ after being told to apply for time off.
She was suing her former employer in the Federal Circuit and Family Court, seeking $786,051 in lost earnings and $100,000 for humiliation, distress and hurt.
The matter was listed for directions on Tuesday but a note on the court file stated the proceedings had been dismissed by consent with no order as to costs.

An art school principal who said she was sacked via an Instagram message while on holiday in Europe is no longer seeking almost $900,000 in compensation. Karen Webster (above) claimed she was dismissed by LCI Melbourne for taking paid annual leave after being told to apply for time off
Ms Webster, who had been earning about $270,000 a year, has held senior academic positions at universities including RMIT and was previously director of the L’Oréal Melbourne Fashion Festival.
Before her teaching career, Ms Webster was a designer for more than a decade and in 2012 was inducted into the Victorian capital’s Fashion Hall of Fame.
Ms Webster began as dean and principal of LCI Melbourne in Collingwood in 2019 under a five-year contract and in June 2022 was told she had amassed an excess of annual leave entitlements.
LCI Melbourne’s chief financial officer Robin Jain allegedly told Ms Webster the unused leave was a financial liability for the business and asked her to use some up.
Ms Webster said she applied in August to take leave between January 16 and February 17 this year, according