Employer couldn't explain need for operational changes, says worker
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application filed by a worker who claimed that he was unfairly dismissed from his role as a customer relationship officer (CRO) in the PayPal team of a debt collection company.
The worker argued that his dismissal was not a genuine redundancy and that he was dismissed for other reasons. The company, on the other hand, maintained that the dismissal was a case of genuine redundancy due to changes in its operational requirements and that the dismissal was not unfair.
In a decision that sheds light on the complexities of redundancy and unfair dismissal cases, the FWC delved into the circumstances surrounding the worker's dismissal, the company's financial position, and the consultation process that took place.
Background of the case
The worker had been employed as a CRO in the PayPal team of the debt collection company for five years. The company, along with its associated entities, carried on the business of debt purchase and recovery.
During his employment, the worker had raised various concerns regarding the company's conduct, including non-compliance with COVID rules, safety risks, and alleged victimisation.
From July 2022 to August 2023, the worker was absent on workers' compensation. In August 2023, the worker lodged an anti-bullying application with the FWC, naming several company managers as respondents.
In January 2024, the company's group chief financial officer announced that due to significant financial losses exceeding 30 million dollars in the past two financial years, it would be necessary to reduce the group's workforce and make some positions redundant. The company then worked through the restructure of each entity, ultimately making 78 employees redundant across the group.
The company's operational needs
The company said the worker's dismissal was a case of genuine redundancy because it no longer needed his position to be performed by anyone due to changes in its operational requirements.
It argued that the worker was consulted in accordance with the Banking, Finance and Insurance Award 2020 (Award) and was considered for redeployment, but he was not suitable for the available role.
The general manager of the company gave evidence that he had considered various factors when proposing to reduce the PayPal team from 4.5 full-time equivalent employees (FTEs) to 2, including the potential for efficiencies, a reduction in business volume due to PayPal onboarding an additional debt collection agency, and a steady decline in referrals.
The company used a skills matrix, which included factors such as the number of calls per day, average wait times, quality breaches, and experience, to determine which employees in the PayPal team would be retained. The worker ranked fourth out of six employees.
The worker's arguments
The worker argued that his dismissal was not a case of genuine redundancy and that the company had not presented a persuasive explanation of the financial difficulties requiring the reduction in the PayPal team.
He claimed that the skills matrix did not take into account all his positive attributes and that he was not properly considered for a team leader position in Brisbane.
The worker also contended that the consultation process was defective because he was not provided with "all relevant information" about the changes, as required by the Award.
He alleged that the company did not make reasonable efforts to redeploy him and that he could have been redeployed to the team leader role as he was a suitable candidate.
The worker further argued that the redundancies in the PayPal team were a sham and that at the time they occurred, PayPal had not yet engaged another provider.
The FWC's decision
The FWC found that the worker's dismissal was a case of genuine redundancy. It accepted the evidence of the company's chief financial officer about the group's financial position and operational requirements, concluding that the decision to make savings, including in relation to labour, was convincing.
The FWC emphasised the importance of the employer's operational requirements, stating:
"Where an employer realises that it has too many workers doing a particular function, and that it can and should operate with fewer, this realisation is itself a change in the operational requirements."
The FWC also found that the company had complied with its consultation obligations under the Award, rejecting the worker's claim that not all relevant information had been provided.
The discussions and written information provided to the worker covered the required subject matter, including the nature of the change and its expected effects on the worker.
Regarding redeployment, the FWC accepted the evidence of the head of compliance and customer advocacy that the worker was not suitable for the team leader position, noting:
"I accept the evidence of [the employer] that [the worker] was not suitable for this role. It was sensible and compelling. I find that [he] did not have the required qualifications and experience for the role of resolutions team leader and that reasonable retraining could not have rendered him suitable for the role."
The FWC dismissed the worker's argument that his selection for redundancy was unfair, stating:
"Where redundancy involves the reduction of workers in a group, and the Commission is considering whether the redundancy was a 'genuine' one within the meaning of s 389, it is not relevant to inquire into the fairness of the selection process."
The FWC found that the worker's dismissal was a case of genuine redundancy and that there was no unfairness in the dismissal.
It emphasised that the company did not need the worker's role to be performed by anyone and that there was no evidence of any other work he could reasonably have done. The FWC dismissed the application, stating: "The application is dismissed."
The decision serves as a reminder for employers to ensure that they have valid reasons for making positions redundant, comply with their consultation obligations, and consider redeployment opportunities for affected employees.
