If a worker is removed from the payroll system, is that dismissal?

The Fair Work Commission (FWC) recently dealt with a case involving a worker allegedly dismissed after being removed from the payroll system.

In its defence, the employer argued that the worker’s removal from the payroll system did not intend to cause the worker to believe that she was dismissed from work.

‘Dismissal’ via payroll system

Around December 2022, the worker commenced working in the employer’s franchise beauty salon as a casual employee.

During the worker’s shift on 13 May 2023, she told the salon manager that she had accepted work at a nearby but differently owned franchise.

She also advised the manager that while that role may preclude accepting weekday shifts at the employer’s salon, she would still be available for and would like to continue working her Saturday shifts.

On 16 May 2023, during a friendly discussion about working hours, the salon manager advised the worker that winter was a quiet time, and since the salon was not busy, the worker did not need to attend work the following Saturday, to which the worker agreed.

Since then, there was no contact between the worker and the salon manager for the next three weeks, and the worker argued that during that period, she was waiting for her next rostered shift.

Account login reveals termination

Days later, the worker logged onto “myGov,” which was linked to her Centrelink account, to update her income details.

There, she observed that the questionnaire she was completing advised her that her employment with the salon had been terminated on 22 May 2023.

Unknown to the worker, the employer decided to remove her from the payroll system for June 2023 because it assessed that she would not be required to work at the salon during such a month since it was a quiet period and to save the administrative fee payable to the third party payroll provider.

The employer argued that the worker’s removal from the payroll system was an internal administrative act and not a dismissal. It noted that it neither did nor intend to end the worker’s employment.

However, the worker contended that she was dismissed because the employer removed her from the payroll system and failed to inform her about it. Further, she said that she was not rostered for work after 16 May 2023.

HRD previously reported about a casual worker who believed she was fired because she felt ignored by her employer after weeks of recovering from an injury.

FWC’s decision

After examining the case, the Commission dismissed the worker’s application as it found that no dismissal occurred.

The FWC noted that the worker’s removal from the payroll system was indeed an administrative act by the employer since it did not plan to roster the worker for June 2023 and was unlikely to do so because the business was slow.

It also argued that while the worker was not dismissed, it did not automatically mean that the employer handled the matter well.

“The employer should have but did not reassure [the worker] when removing her from the payroll system that she nonetheless remained employed and eligible to be offered shifts,” the FWC stated.

It also advised the worker to exercise a “higher degree of care when deciding to remove casual employees, even temporarily, from the payroll system” to avoid triggering further problems.