FWC calls dismissal 'harsh, unjust and unreasonable'
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case that pitted a construction estimator against a small construction company.
The worker argued that his dismissal, ostensibly due to redundancy, was actually retaliation for his complaints about unpaid wages and superannuation.
The case raised important questions about the line between genuine redundancy and unfair dismissal, especially in the context of small businesses facing financial pressures.
Worker’s complaints and retaliation
The worker had been employed as a construction estimator for about 19 months when he was dismissed in April 2024. The employer cited redundancy due to financial difficulties as the reason for the dismissal. However, the worker's claims argued otherwise.
Evidence presented to the FWC showed that the worker had made several complaints to the Australian Taxation Office (ATO) about unpaid superannuation.
These complaints dated back to November 2022, when the ATO established a debt against the employer. The worker also stated that he had been threatened with dismissal on multiple occasions after making these complaints.
The employer, represented by the company director, maintained that the dismissal was necessary due to the company's financial situation. The director said to the worker, "I need you to go because our company is not going well, the business is not going well."
However, the FWC found inconsistencies in this argument, particularly in light of a job advertisement for an estimator position that appeared shortly after the worker's dismissal.
Redundancy or retaliation?
The FWC highlighted the importance of proper consultation and communication during redundancy processes. In this case, the employer failed to consult with the worker about the potential redundancy or explore alternative options.
"[The worker] denies there were any discussions between himself and [the manager] that might be regarded as consultation about an impending redundancy and that he was just told by [the manager] of the decision."
This lack of consultation was a key factor in the FWC's determination that the dismissal was not a genuine redundancy.
The case shed light on the challenges faced by businesses during financial difficulties. While the FWC acknowledged that the employer may have been experiencing financial pressures, it said that this does not justify improper dismissal procedures.
The Commission stated:
"It is possible, even likely, that [the employer] is in a difficult trading position. The fragments of material provided to the Commission by [the employer] would suggest that that is indeed the case. However cogent, plausible evidence has not been put forward by [the manager] as to why [the worker's] position needed to finish either at all or when it did."
Genuine redundancy or unfair dismissal?
After considering all the evidence, the FWC determined that the dismissal was unfair. The Commission found that there was no valid reason for the dismissal and that it was harsh, unjust, and unreasonable.
In its conclusion, the FWC said:
"[The worker's] dismissal was harsh, unjust and unreasonable. It was harsh since the termination did not need to take place when it did, even viewed through a prism that [the employer] faced financial pressures which required addressing. It was unjust as it was implemented without regard to [the worker's] workplace rights in respect of payment of superannuation. His dismissal was unreasonable since, to the extent that [the employer's] finances played any operative part in the decision to dismiss, there was no attempt to discuss any alternatives with [the worker]."
The Commission ordered compensation for the worker, taking into account various factors including the anticipated period of continued employment and the worker's efforts to mitigate his losses. The final compensation amount was calculated as:
"My calculation of the amount payable to [the worker] is set out in the following table: ... TOTAL $8,366 (wages) and $920 (superannuation)"
This decision reminds employers, particularly small businesses, of the importance of following proper procedures when considering redundancies or dismissals, even in challenging financial circumstances.
