CEO said termination had nothing to do with personal relationship
In a recent case, the Fair Work Commission considered an employer who dismissed his ex-wife from her employment with his company. Although the employer dismissed his ex-wife on the grounds of genuine redundancy, the Commission found that he used the financial impacts of COVID-19 as a convenient excuse to terminate her employment. The case provides an important reminder of the need to impose personal and professional boundaries in the workplace.
The employee worked as a marketing director for a technology company. In November 2020, the employee and the company’s CEO, who were married, separated. Four months later, the CEO decided that, due to the company's financial situation, a marketing employee was no longer affordable nor required. He subsequently notified the employee that her position had been made redundant. The employee filed a claim with the Fair Work Commission, asserting that her termination was not a genuine redundancy but an unfair dismissal.
The Hearing
The employee contended that the CEO simply wanted to “get rid of her” because of the breakdown of their personal relationship. She stated that the CEO had told several people, including their friends and family, that he no longer wanted to work with her due to their marital breakdown.
In contrast, the CEO submitted that the termination had nothing to do with their personal relationship. He asserted that, given the financial impacts of COVID-19, the company needed to make considerable cutbacks to avoid insolvency. He also contended that there were no other roles for which the employee would be suitably qualified.
Judgment
The Commission was not satisfied that the CEO had established that he no longer required the employee’s role to be performed due to changes in the company’s operational requirements. Although it accepted the company was in difficult financial circumstances, the Commission saw no reason why the CEO could not have reduced the employee’s work and salary until the situation improved, as was done for other workers in the company. This led the Commission to find that the employee’s dismissal was not due to a genuine redundancy.
The Commission also noted several factors that spoke to the dismissal’s unfairness, including the CEO’s failure to consult the employee regarding the reasons for her dismissal and his failure to pay the employee her outstanding wages and leave entitlements. With this, the Commission found the dismissal was unfair and ordered that the company pay compensation of $27,068.25 plus superannuation to the employee.
Key Takeaways
- When working with family or friends, employers should adopt strict personal and professional boundaries in the workplace
- Where an employee is made redundant, an employer must show that they no longer required the employee’s role to be performed by anyone, due to operational changes
- A company’s financial difficulties may not be a sufficient reason to make an employee redundant
- Where termination is deemed not a genuine redundancy, the Commission may consider whether the dismissal was unfair
