No closure: Worker finds out business didn't shut down after redundancy

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case where a worker challenged his employer's claim of business closure after discovering that operations continued and other employees remained employed after his dismissal.

The case raised questions about employer obligations during organisational restructuring, the nature of genuine redundancy, and workers' rights when companies face financial difficulties.

The worker argued he was unfairly dismissed and denied promised entitlements, while the employer later entered liquidation, adding another layer of complexity to the proceedings.

Employer’s alleged operational changes

The worker started as a quality, safety and environmental manager in January 2022 at the employer's Altona North facility in Victoria. His role involved safety oversight, WorkCover claim administration and return-to-work coordination across several linked companies. He earned $150,000 annually.

On January 25, 2024, the employer told the worker that business arrangements were changing and operations would end that month. The worker was told he wouldn't join a new company the employer had set up. Instead, he would be made redundant and paid notice period entitlements until he found new work.

When his employment ended on January 31, 2024, the worker only got a separation certificate and his unused leave pay. The employer didn't provide any formal termination notice, discussions about other job options, or the promised redundancy and notice payments.

Employer’s continued operations after redundancy decision

At the time of dismissal, the worker managed 13 active WorkCover claims. As part of his final duties, he contacted each of these employees to inform them about their upcoming redundancies.

After his dismissal, he continued receiving calls from these employees and WorkCover until February 6, when his phone access was cut off. Through these conversations, he learned that some employees were still being paid, while others had successfully challenged their dismissals and returned to work.

The Commission noted: "[The worker] continued taking calls from some of these employees and WorkCover up until 6 February 2024 when his phone access was removed. In taking these calls, he was told by some employees they were still being paid by [the employer]. Others told him they had made claims for unfair dismissal and had been reinstated after 31 January 2024."

Employer goes into liquidation

The case took an unexpected turn when the employer entered court-ordered liquidation in April 2024. The liquidator informed the Commission they had no funds to participate in the proceedings.

This raised questions about whether the case could continue. The Commission cited previous decisions that allowed the matter to proceed: "where a company is in administration or court ordered liquidation, leave of a court for Commission proceedings against the company to commence or continue is not required because the Commission is not a court."

The Commission said: "The determination of this matter is made difficult by the circumstances facing [the employer] and its representative responsible for this liquidation by court order. Given [the employer] has not filed any material or information to contest [the worker's] application, I consider it appropriate to make a Jones v Dunkel inference that [the employer] has no evidence to contradict [the worker's] submissions and proceed on that basis."

Is it unfair dismissal?

The Commission found no valid reason for the dismissal. The evidence showed the worker would have stayed employed until March 31, 2024, when the company actually ended operations.

The decision emphasised: "[The worker] would have remained employed for a further 8 weeks and 2 days, until 31 March 2024 when [the employer] really did wind up."

Looking at the total impact on the worker, the Commission noted: "[The worker] has been denied payment of a notice period and up to 6 weeks redundancy payments. He has also not received the benefit of his entitlement accrual for the period he has been out of work."

Based on these findings, the Commission ordered: "an order requiring [the employer] to pay [the worker] the amount of $17,531.43 gross, less taxation as required by law, plus superannuation to be paid into [the worker's] nominated fund, with both payments to be made within 14 days of the date of this decision."