Employee dismissal deemed unfair due to lack of consultation

04 March 2022

The Fair Work Commission (FWC) has deemed an employee’s redundancy unfair despite accepting the business no longer had a need for the position. The decision was based on a failure to demonstrate compliance with award obligations.


Overview of the facts

The employee, an administration manager covered by the Clerks – Private Sector Award 2020 , claimed her dismissal was not a genuine redundancy, but rather the result of her working from home when the business owner visited the office.

The day after the owner’s visit, the operations manager told the employee the owner was not happy she wasn’t there, or with the state of the office.

While there was no reference to a downturn in business nor mention of the word “redundancy,” the operations manager claimed to discuss a move to consolidate the business’ administrative function.

The employee asked if he was “putting her off” (meaning dismissing her) and asked if it was because of her attendance. In his evidence, the operations manager conceded the discussion did focus on her working from home, but confirmed he had been instructed to tell the employee her role was being split and would be performed by others.

The operations manager confirmed the employee was being dismissed and would receive payment in lieu of notice and finish effective immediately.

Nearly two weeks after the dismissal, the business processed and paid the employee seven weeks’ severance pay, taxed as a redundancy payment.

The decision

When considering the criteria in s.389 of the Fair Work Act 2009 to determine whether the redundancy was genuine, the Commission must take into account: whether the business no longer requires the employee’s job to be performed by anyone; and whether the business has complied with any obligation in a modern award or enterprise agreement to consult about the redundancy.

In this case, the business was able to demonstrate it had suffered a significant downturn and had to reduce the workforce by about 25 employees. However, the business conceded it didn’t follow the consultation requirements in the Award. It claimed it was unfamiliar with the obligations given those in managerial positions were tradespeople, not HR professionals. The business maintained even if it did comply with the consultation obligations, the result would have been the same.

Given the business failed to comply with the consultation obligations, the Commission concluded the dismissal was unfair. The employee’s application was successful and compensation was awarded.

Learnings for business

While the Commission was satisfied that the employee was dismissed due to her role no longer being required and not because of her absence from the office, this case reiterates the importance of consultation and following correct process. As the business failed to comply with the Award, the outcome of this unfair dismissal was steered in the employee’s favour.

How the Victorian Chamber can help

Before you take any action, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222 to discuss your obligations. Our experienced Workplace Relations Consultants can also provide you with practical support and guidance to ensure that your processes comply with and meet the obligations of relevant modern awards and enterprise agreements.

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