Did the employer bypass the improvement process? FWC decides
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a services worker and her employer. The case highlighted important issues around redundancy, performance management, and procedural fairness in terminations.
The worker argued that her dismissal, which her employer claimed was due to redundancy, was not genuine and instead unfair. She said that her role still existed and that the real reasons for her termination were not properly communicated to her.
The worker also claimed that she was not given an opportunity to respond to any concerns about her performance before the decision to dismiss her was made.
The case involved a worker who had been employed by a laundry services company since November 2022. The worker claimed she had worked for the business under previous owners since September 2010, though this wasn't definitively established.
The employer, a small business with eight employees, claimed that the worker's position had become redundant due to operational changes.
The worker's role had expanded when the current owner took over. Initially, her duties included washing and sorting sheets, and packing orders.
Under new management, she learned to operate machinery, deal with customers, and handle ironing tasks. The worker described her role at the time of termination as a "co-management role" involving staff and customer liaison.
On April 12, 2024, the employer had a conversation with the worker about potentially making her role redundant. The worker continued to work for another week before being officially informed of her dismissal on April 22, 2024.
The FWC had to determine several key issues in this case:
The FWC also had to consider the employer's size and resources, as well as the worker's length of service and future employment prospects.
The FWC found that the dismissal was not a genuine redundancy. The decision stated:
"I cannot be satisfied from the evidence before me that the job performed by [the worker] was no longer required to be performed by anyone because of changes in the operational requirements of [the employer]."
This finding was based on evidence that the employer's decision to remove certain duties from the worker was primarily due to performance concerns rather than operational changes.
The employer had taken away the worker's phone, which was used for customer interactions, due to customer complaints. The employer's evidence suggested that if he took away more functions due to performance concerns, the worker's role would become "null and void".
The case highlighted significant issues with the employer's approach to performance management. The FWC found that the employer had not properly communicated their performance concerns to the worker or given her an opportunity to respond. As stated in the decision:
"[The worker] was not notified of those matters."
The employer had several performance concerns about the worker but had not formally communicated these or given her a chance to improve. Instead, the employer decided to remove functions from her role, effectively creating a redundancy situation.
While the FWC acknowledged that the employer was a small business, it said that this did not excuse them from following proper procedures when dismissing an employee. The decision noted:
"I am also of the view that her dismissal was procedurally unfair, as the reasons held by [the employer] for her dismissal included matters that were not put to [the worker] before they were acted upon, giving her no opportunity either to remedy deficient performance or to give a response to [the employer] about concerns he held."
The employer had consulted a solicitor before the dismissal, but there was no evidence about how the employer formed his views or decided on the procedure to follow when dismissing the worker.
In conclusion, the FWC found that the worker's dismissal was unfair. The decision stated:
"I find that [the worker's] dismissal was unjust and unreasonable. It was unjust as she was not given an opportunity to respond to [the employer's] conclusion that she should be dismissed. Her dismissal was unreasonable since the factors relied upon for her dismissal were not established as factually correct."
As reinstatement was deemed inappropriate, the FWC awarded compensation to the worker. The compensation was calculated based on the worker's expected earnings for a three-week period, which the FWC determined was the likely duration of continued employment had the unfair dismissal not occurred. The total compensation ordered was $4,162, comprising $3,750 in wages and $412 in superannuation contributions.
The case serves as a reminder to employers, particularly small businesses, of the importance of following proper procedures when dismissing employees, even in cases of perceived poor performance.
