FWC: Job ad doesn't invalidate genuine redundancy

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case where a worker challenged his redundancy after discovering a job advertisement for a similar position at his former workplace just weeks after his dismissal.

The case raised important questions about redundancy processes in small businesses. The worker argued his position wasn't truly redundant and proper procedures weren't followed, while the employer cited severe financial difficulties and operational changes as the basis for their decision.

The outcome provides valuable insights for both employers and employees about redundancy requirements and proper procedures.

Worker’s dismissal

The worker had been employed as an assistant building surveyor at a building permits company for nearly three years when he received notice of his termination on 6 June 2024. In the termination letter, the employer wrote:

"As a result of the economic downturn, business performance and the building sector slowdown, the position of assistant building surveyor is no longer needed. Regrettably this means your employment will terminate."

The worker filed his unfair dismissal application 12 days after the standard 21-day deadline but was granted an extension. His annual earnings were below the high-income threshold of $167,500.

The employer, which operated under the Small Business Fair Dismissal Code, objected to the application on two grounds: they had complied with the Code, and the dismissal was a genuine redundancy.

Employer’s financial situation and worker’s redundancy

The employer operated two offices - in Geelong and Mount Waverley. The director gave evidence of significant financial challenges, with the Geelong office running at a loss since its establishment during the COVID-19 pandemic.

The company's financial position had deteriorated significantly, as shown in testimony: "The Geelong and Mount Waverley offices receiving a combined total of only 4 applications per day at the time of the dismissal (down from 40) and [the employer] having lost $900,000 over the preceding 18 months."

The director said he had personally financed these losses and had entered into arrangements with the Australian Taxation Office regarding tax liabilities due by 30 June 2024.

Worker’s job gets advertised

Four weeks after his dismissal, on 4 July 2024, the worker found a job advertisement for an assistant building surveyor position. When he contacted the recruitment consultant, she confirmed by SMS that the role was with his former employer.

The director testified he hadn't authorised the advertisement and that the recruitment consultant posted it without approval. He explained he had only discussed potentially hiring an administrative assistant or university student. The Commission accepted this explanation, noting the advertisement wasn't for the Geelong office.

The case was further complicated by evidence about another former assistant building surveyor who had been rehired as a contractor.

The director explained this was a temporary arrangement to handle an unexpected staff shortage when both office managers left shortly after the worker's redundancy.

Redundancy and redeployment considerations

The employer made the redundancy decision on 5 June 2024 and informed the worker the next day. No consultation took place before this notification.

The director said he believed no consultation was required as no modern award covered building surveying work. He had investigated award coverage, including checking with "Fair Work," and concluded no modern award applied to the role.

The worker argued he could have been redeployed to the Mount Waverley office or continued employment on a reduced salary. However, the director testified that even a $10,000-$20,000 salary reduction wouldn't have addressed the financial issues, as the priority was reducing staff numbers.

The Commission emphasised that examining a redundancy doesn't involve reviewing the business decision itself:

"Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as [the employer] acted as it did because of changes in its operational requirements."

While noting procedural issues, the Commission observed:

"[The employer] did not consult or otherwise notify [the worker] in relation to the redundancy until it notified him of his dismissal. This represents a serious deficiency in the procedure adopted by [the employer]."

However, the Commission concluded that consultation wouldn't have changed the outcome:

"[I] do not consider that consultation would have changed the decision to dismiss [the worker] on the basis of redundancy... even if the parties had discussed possible measures to avert the redundancy, [I am] not persuaded that these would have resulted in the operational reasons for the dismissal being overcome."

The Commission dismissed the unfair dismissal application, finding the redundancy was genuine and the dismissal was not harsh, unjust, or unreasonable. The worker had secured new employment by 18 July 2024 at a comparable rate of pay.