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Rural Fire Service volunteer Paul Parker said he was dismissed after saying Scott Morrison should "go and get f***ed" after getting angry at a remark he made about the jobs of volunteers.
But the RFS denied he'd been sacked saying: "We can confirm Paul remains a member of the NSW RFS and has not been dismissed".
Asked about the issue, Mr Morrison said he was pleased Mr Parker wasn't sacked.
"There should never be any question about whether he should have been fired or not, of course, he shouldn't," he told reporters on Monday.
"I understand Paul was feeling incredibly exhausted, and incredibly drained by those events and he was working his tail off defending his community."