FWC finds link between worker's complaints and redundancy selection
The Fair Work Commission (FWC) recently dealt with an unfair dismissal claim where a worker challenged his employer's redundancy process after he raised concerns about unpaid entitlements.
The worker argued his dismissal was not a genuine redundancy but rather a response to his complaints about unpaid superannuation and other entitlements.
The case raised important questions about small business obligations, proper consultation processes, and the timing of redundancy decisions in relation to workplace complaints.
Background of the case
The worker had been employed since March 2021 as a plumber at a small plumbing business in New South Wales. In March 2024, he started raising concerns with his supervisor about unpaid superannuation.
These discussions continued into June 2024, when the supervisor took four staff members for coffee to discuss the superannuation issues.
On 1 July 2024, the worker attended a union meeting where employees discussed a new enterprise agreement and elected his supervisor as their delegate. During this meeting, workers raised concerns about underpayments. The worker later told colleagues he believed he was owed around $20,000 in unpaid entitlements.
Following the meeting, the operations manager called the worker and offered to make a cash payment if he was experiencing financial hardship. The worker refused, saying any payment needed to go through proper channels.
On 4 July 2024, he submitted a formal claim for approximately $24,000 in unpaid superannuation, travel allowance, and redundancy contributions.
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On 8 July 2024, the worker arrived at his worksite to find his name removed from the work roster. When he contacted management about this, the operations manager told him "it's best to pull the pin" and confirmed it was his last day.
Consultation requirements to implement redundancy
The employer argued they had only 14 employees at the time, making them a small business, and claimed the dismissal complied with the Small Business Fair Dismissal Code.
They maintained that work was "running low" and cited increased costs from the new enterprise agreement as the reason for reducing staff numbers.
The Commission found the employer breached consultation requirements in their enterprise agreement. The decision noted: "[The employer] did not comply with any of these obligations. The uncontested evidence is that [the worker's] name was removed from a board listing people working on 8 July 2024, followed by [the manager] telling [the worker] in a phone call that 'it's best to pull the pin' and that it was [the worker's] last day."
Employer’s selection process for redundancy
The Commission's decision noted how the worker's recent underpayment claims likely influenced his selection for redundancy: "[The worker's] evidence that [the manager] had offered to make a cash payment to satisfy his underpayment issues was not contested... That suggests that [the worker's] underpayment claim may have been a factor in why he was selected as one of the plumbers to be made redundant."
In finding the dismissal unfair, the Commission stated: "Although I have found there was a valid reason for [the worker's] dismissal associated with [the employer] needing to reduce its employment costs, [the worker] was denied any semblance of procedural fairness."
The final ruling emphasised: "I conclude that the main reason for the procedural fairness deficiencies was not the size of [the employer] or its lack of human resource specialists. I consider [the worker's] underpayment claim was the main contributing factor."
After considering the employer's financial situation and various other factors, including the worker's efforts to find new employment, the Commission ordered reduced compensation of $13,500.67 plus $1,552.57 in superannuation, to be paid within 28 days of the decision.