FWC shoots down claim of genuine redundancy

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FWC shoots down claim of genuine redundancy

A maintenance manager has been awarded more than $17K after a tribunal ruled his dismissal was not a genuine redundancy.

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A maintenance manager has been awarded more than $17K after a tribunal ruled his dismissal was not a genuine redundancy.

Facts and background


Mr D began working for The Cake Syndicate, trading as Susan Day, on 9 May 2016 as a maintenance manager. At that time, the company was privately owned.

On 30 June 2017, Susan Day was acquired by the Kin Group, a national company in the food industry. On 1 November 2017, Mr T took over as the general manager of Susan Day, and on 18 December 2017 Ms C was appointed as operations manager.

Between 18 and 28 December, Ms C conducted a review of the overall operations structure, including production, maintenance and occupational health and safety. Through this process, she identified changes necessary to improve costs and efficiency. These changes meant that some roles were identified for redundancy, including Mr D’s position. Ms C determined that the maintenance manager role would be “better managed by the engineering manager and the maintenance team members”.

As Ms C was on leave in January 2018, the redundancies were not advised until February 2018. On 12 February 2018, Ms C met with Mr D and notified him of the decision to make his position redundant. On the same day, Mr D’s employment was terminated. He was paid four weeks’ pay in lieu of notice and four weeks' redundancy pay.

On 5 March 2018, Mr D made an application for unfair dismissal remedy. Susan Day then filed a Form F3 – Employer Response to Unfair Dismissal, which submitted that the dismissal was a genuine redundancy.

The law


Under section 394 of the Fair Work Act 2009, a person who has been dismissed may apply to the FWC for an unfair dismissal remedy.

Section 392 of the Act states that an employer may be ordered to pay the person compensation, instead of reinstating them.

Section 385 of the Act provides that a person has been unfairly dismissed if the FWC is satisfied that:
  • the person has been dismissed
  • the dismissal was harsh, unjust or unreasonable
  • the dismissal was not consistent with the Small Business Fair Dismissal Code; and
  • the dismissal was not a case of genuine redundancy.
Section 389 of the Act states that a person’s dismissal is a case of genuine redundancy if:
  • the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise, and
  • the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
Furthermore, a person’s dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

The question


The question here was whether Mr D’s dismissal was a case of genuine redundancy and, if not, whether Mr D was unfairly dismissed.

Considerations and decision


The FWC pointed out that the responsibility was on Susan Day to prove that Mr D’s dismissal was due to a genuine redundancy.

The commission was not satisfied the company put sufficient reliable evidence forward to show that was the case.

Specifically, there was nothing to indicate that there was a genuine operational need to reduce the number of employees, either because of costs pressures, duplication of roles or a change in strategic direction.

Furthermore, the FWC was sceptical of Ms C’s review between 18 and 28 December, which included two weekend days and two public holidays, and her lack of communication with Mr D and other maintenance staff about their roles before making a decision.

In determining whether Mr D was unfairly dismissed, the FWC considered whether the dismissal was harsh, unjust or unreasonable.

The commission determined Susan Day did not have a valid reason, relating to capacity or conduct, to terminate Mr D’s employment. Therefore, it was satisfied that Mr D was unfairly dismissed.

Mr D did not seek reinstatement. The FWC then considered compensation. It ordered that Susan Day pay Mr D an amount of $17,347.14 plus 9.5% superannuation as compensation.

The bottom line: It is the responsibility of an employer to prove that the dismissal of an employee is a case of genuine redundancy. Without sufficient evidence, the FWC will not be satisfied a dismissal is a genuine redundancy and there may be a case for an unfair dismissal.

Bijiga Defa v The Cake Syndicate Pty Ltd T/A Susan Day Cakes [2018] FWC 3694 (6 July 2018)
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