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Not-so-genuine redundancy

Submitted on Wednesday, 27th September 2017

The Fair Work Commission has recently determined an employee made redundant was unfairly dismissed.

The employee, a Head Chef, was made redundant by a sports and community club (the Club) on 14 March 2017, after it decided to abolish the permanent full time Head Chef position as part of an alleged organisational restructure.

The Commissioner noted the Club grew increasingly dissatisfied with the Chef from November 2015 for a number of reasons including, but not limited to, the Chef seeking to apply an agreement concerning the days he would not work in order to meet his child care obligations as well as the employee refusing to agree to vary his contract of employment.

Amidst growing tensions, the Chef was contacted by a former employee on 27 September 2016, who advised he had been offered his Head Chef role.

The frustration culminated in an incident which occurred on Valentine’s Day 2017, when the Chef declined to cover the shift of another employee who had called in sick at late notice. The Commissioner found, it was at this stage, the Club had made its preliminary decision to abolish the Chef’s role.

In a letter to the Chef the next day, the Club stated it had “become necessary to commence an organisation restructure which will inevitable (sic) affect certain, employees, including the possibility of redundancies”. The only employee to receive the letter was the Chef.

The Chef was asked to attend a meeting which took place on 14 March 2017. During the meeting the Chef was informed his position was redundant. The Chef was informed casual staff would be engaged. The Chef was offered a casual position with no guarantee as to the amount of hours available. The Chef rejected the casual position.

Following the 14 March 2017 meeting, the Chef filed an Unfair Dismissal claim.

The Chef maintained the dismissal was not a case of a genuine redundancy. He argued: he was not properly consulted about the ‘restructure’; he was not offered appropriate redeployment; and the Club still required his job to be performed.

The Club attempted to defend the claim and maintained its restructure, which comprised installing a partition dividing the bar and food areas, gave rise to the redundancy. The Commissioner considered the partition had “little effect in practice” and rejected the argument it “represented a major structural reform so as to provide a basis to restructure the Club’s labour requirements”.

Further to this, the Commissioner was not convinced the Club no longer required the Chef’s role to be performed. The Commissioner was satisfied the Club’s decision to dismiss the Chef was fuelled by its “dissatisfaction with [the Chef’s] conduct and/or work performance”.

The Club argued the dismissal could not be considered as harsh, unjust or unreasonable as the Chef was offered, but ultimately rejected, an offer of on-going employment as a casual chef. The Commission described the Club’s attempt to comply with the consultation requirements “an illusion”.

Noting the above, the Commissioner decided the Club failed to satisfy the requirements set out in section 389(1)(b) of the Fair Work Act 2009 (Cth) which requires employers to comply “with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy”. As a consequence of this failure the dismissal cannot be regarded as a genuine redundancy and was therefore harsh, unjust or unreasonable.

As demonstrated in this case, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals to increase your knowledge of the redundancy process including what triggers a redundancy and the consultation requirements. This course also provides invaluable information regarding counselling and discipline processes, and how to best manage an unfair dismissal claim.

Written by Benjamin Cirona

Fair Work Commission Decision [2017] FWC 4381

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