Worker claims unfair dismissal after alleged lapses in consultation procedure
The Fair Work Commission (FWC) recently dealt with a case involving a worker's unfair dismissal claim against her employer following the sale of a hotel where she worked as a head chef.
This case highlighted several key employment law issues, including the definition of genuine redundancy, consultation obligations, and reasonable redeployment considerations.
The FWC's decision provided insights into how these factors are evaluated in redundancy situations, particularly when businesses undergo ownership changes.
Background of the case
The worker had initially been employed as a chef at one hotel before transferring to a related entity as head chef at another hotel. When the second hotel was sold, the new owners decided not to offer permanent employment to existing staff. The worker declined an offer of casual employment from the new owners.
The employer terminated the worker's employment due to redundancy following the sale. The worker then filed an unfair dismissal claim, arguing she should have been redeployed to her previous position at the first hotel.
The employer raised two jurisdictional objections: that the application was filed late (which was later dismissed) and that the dismissal was a case of genuine redundancy under the Fair Work Act.
Key issues considered
The FWC examined several crucial aspects in determining whether the dismissal constituted a genuine redundancy:
- Whether the job was no longer required due to operational changes
- Compliance with consultation obligations under the relevant award
- Whether it would have been reasonable to redeploy the worker
The FWC found that the sale of the hotel meant the worker's job was no longer required by the employer, satisfying one criterion for genuine redundancy.
Regarding consultation, the FWC outlined the process followed:
"Although the consultation process was conducted in a much shorter period than would preferably be the case, I am satisfied that this is explained by the lengthy process in finalising the sale of the [hotel] and that [the employer] acted promptly as soon as the sale was finally confirmed."
The FWC determined that despite the short timeframe, the employer had complied with its consultation obligations under the relevant award.
Assessing reasonable redeployment
The decision discussed whether it would have been reasonable to redeploy the worker to her previous position at the first hotel. The FWC considered conflicting evidence about promises allegedly made to the worker regarding her return to the first hotel.
The FWC emphasised the importance of written contracts:
"Given the competing evidence about what was said during the meeting between [the worker], [the worker's support person] and [the operations manager] on around 30 July 2023, I consider [the worker's] contract of employment with [the employer] to be the most reliable evidence."
The FWC found no clear evidence of a legal entitlement or firm commitment for the worker to return to her previous position.
Ultimately, the FWC upheld the employer's jurisdictional objection, concluding that the dismissal constituted a genuine redundancy.
The FWC stated:
"I have determined that [the worker's] dismissal constitutes a 'genuine redundancy' within the meaning of s.389(1) of the FW Act and that the exclusion regarding reasonable redeployment in s.389(2) of the FW Act is not applicable."
This decision underscores the importance of clear communication and documentation in employment relationships, particularly during organisational changes. The FWC's reasoning provides valuable guidance on how genuine redundancy is assessed, especially in the context of business sales and related entities.
However, the FWC noted some concerns about the employer's conduct:
"[The employer's director] admitted referring to 'performance management' being an option that other businesses may have utilised to end [the worker's] employment, as opposed to implementing a redundancy and making a severance payment, during the meeting on 22 February 2024... what [the employer's director] stated was inappropriate and regrettable."
This highlights the need for employers to handle redundancy discussions sensitively and professionally, focusing solely on the operational reasons for the redundancy.
The case serves as a reminder for HR professionals and business partners to ensure proper consultation processes are followed, even in time-sensitive situations, and to carefully consider redeployment options within their organisation and related entities when implementing redundancies.
