Overview of the facts

The Fair Work Commission (“Commission”) found that due to the business’ failure to fulfil its consultation obligations under the relevant Award, the employee’s dismissal was unfair and was not a genuine redundancy.

Before determining the appropriate remedy, the Commission sought submissions from both parties.

The employee did not wish to be reinstated and made submissions as to the amount he considered he would have received in JobKeeper payments if the business had enrolled in the JobKeeper scheme. The employee argued had he been entitled to those payments the business would not have been required to make changes to its workforce. The employee suggested if the business had enrolled in the JobKeeper scheme he would have been retained his employment for up to a year and received $25,700 gross.

Considering the employee’s submission, Commissioner Bissett noted “whilst I acknowledge the matters raised by [the consultant], it is not the Fair Work Commission’s role to require an employer to enroll in the JobKeeper program. What [the consultant] might have received had the Respondent chosen not to make any employees redundant is, in my view, to engage in speculation well beyond any evidence before me.”

The employee stated that he had intended to stay with the business for five years. However, the Commission accepted the business’ argument that the employee would not have remained employed beyond another week, stating “COVID-19 was a disruption that no business could have planned, for at the time [the consultant] was engaged and its longer term effects on employment are yet to play out.”

The Decision

The Commission found that while the business did not consult with the employee as required under the relevant award, it was satisfied that the consultant would only have remained employed with the business on a longer-term basis if he could have convinced the business and other employees to restructure in some way such that his position could have been retained.

This may have required other employees agreeing to reduce their hours of work, their pay or for someone else to be made redundant. For this reason, the consultant was rewarded approximately $1,000 which was one week’s wages plus superannuation.

Learnings for Business

While the compensation paid to the consultant was well below the statutory compensation cap in this instance, the business still had to go to the time, effort and expense of defending its position through the Commission.

Businesses can be ordered to pay up to $76,800 in compensation for unfair dismissal cases and it is important for employers to understand their obligations when it comes to redundancy and terminations. By following the correct processes and affording employees a consultation, businesses can avoid costly and lengthy unfair dismissal claims.

How we can assist

Before you take any action, call our Workplace Relations Advice Line.

Our experienced team are here to give you over-the-phone advice about human resources or workplace relations issues. Our Complete and Connect members have free and unlimited access to expert advice through the Workplace Relations Advice Line.

Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals course to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claim.

Written by Jenny Gow Workplace Relations Advisor

[2020] FWC 5279