Role no longer deemed essential by employer
The Fair Work Commission (FWC) recently dealt with a worker’s claim that he was fired in a “humiliating and disrespectful” manner, aside from being “targeted for dismissal.”
The worker, Ling Xu, applied for a remedy against his employer, Australian Dairy Park Pty Ltd. The latter said his employment ended due to genuine redundancy, but the worker said it was unfair dismissal.
The employer is a dairy manufacturing facility with expertise in producing and packaging infant formula milk powder and functional milk powders.
It operates as a subsidiary of Ausnutria Pty Ltd and is an associated entity of Nutrition Care Pharmaceuticals (NCP). Xu started in 2017 as a production supervisor, until he was promoted as its performance improvement manager from October 2020 until the termination of his employment.
Xu's responsibilities included measuring, reporting, and enhancing staff performance, such as quality, cost, safety, and customer service, to ensure continuous improvement.
According to records, around 85% of the employer's business activities revolve around the production of infant formula, with a significant portion of it exported to China.
To meet Chinese regulatory requirements, the employer must hold a China Infant Formula Product Registration, which expired in February 2023, with the anticipation of renewal not expected until early 2024.
In the absence of this registration, the employer reported a 47% drop in sales compared to 2022 and a staggering 97% reduction in production rates.
To address this, a member of the employer's executive team sent a letter to Xu in March 2023, indicating that an operational review was necessary "due to a significant reduction in Australian Dairy Park's current production capacity."
This review would address staffing levels, operational needs, redeployment opportunities, and the possibility of redundancy.
After a series of correspondence between the parties, the employer's management team held a meeting with Xu in April. During this meeting, Xu was informed about the termination of his employment on the grounds of redundancy. He was also provided with a termination letter dated the same day.
The letter explained that the employer had received advice to conduct a "critical review" of its organisational structure and resource allocation. It said it had to perform changes that were necessary to secure the long-term viability and success of the company.
According to the letter, based on the current and projected business requirements, the role of performance improvement manager was no longer deemed essential.
Furthermore, the letter indicated that the employer had explored redeployment possibilities within the company and associated entities but it was unsuccessful.
Among other allegations of misconduct, the worker's case against the employer was about the way he was dismissed. He said, "the redundancy procedure was harsh and humiliating" due to “harsh notice” and "a refusal to provide a “reasonable explanation.”
He added that "the outcome was communicated in a 'young manager’s' office, with whom [he] had no connection." He said he found it "humiliating and disrespectful."
Xu argued that while the company's production volume has slowed while it awaits the renewal of the formula registration, the employer continues making “the products.”
He also said the employer did not make any other employees besides him redundant, adding that his role as a performance improvement manager is an important part of the company's operations, and "he does not accept that his job is no longer required."
Moreover, Xu said "the true reason for his dismissal arises from an executive's 'long desire to eliminate' him from the business, after a lengthy period of bullying."
He claimed that he was "targeted for dismissal."
The FWC found that “there has been a change in the operational requirements of the [employer’s] enterprise.”
“The uncontested evidence is that a significant component of the [company’s] business concerns the production of child infant formula, with a vast majority of that product exported to China. It is not in dispute that [its] formula registration has not been renewed by the Chinese authorities,” it said.
“In the absence of holding a current formula registration, the company is precluded from exporting its product to China and this informs the significant reduction in its sales and thereby its production levels.”
The Commission said that the employer was justified in implementing its cost-cutting measures to ensure that it stays afloat during this period of uncertainty.
As for Xu’s claim that he was dismissed in a “humiliating and disrespectful” manner, the Commission said that there is “no direct evidence that draws a causative link between [his] redundancy and [his] allegation that he was targeted for dismissal.”
The Commission said that the decision for him to be redundant “was made by the executive team and the headquarter leaders, not by [a sole executive] alone.”
Thus, it ruled that he was not unfairly dismissed, and consequently, the Commission rejected his application.
