Whether a case leans towards a genuine redundancy or unfair dismissal depends on elements within the employment contract, or lack there of. In today’s economic climate, it is very common from employers to make employees redundant. But if the redundancy is not genuine, an employee may initiate an unfair dismissal claim against their employer. There are very specific requirements and characteristics applicable to a genuine redundancy. Where these elements are not satisfied it is likely that the employee has been unfairly dismissed.
Paul MacIntyre’s situation in his workplace
For over 16 years Paul MacIntyre worked as Manufacturing Manager for Delta Shelving, an Australia-wide firm with 1000’s of employees specialising in the manufacture and supply of fixtures to large supermarket chains.
Some of the company’s product is custom built, and in this area, Paul was directly in charge of a team of 8 staff members. He carried out hands-on work in production, manufacturing and design and also handled general managerial duties.
Paul never signed an employment contract. He was covered by the Manufacturing and Associated Industries Occupations Award 2010. His annual salary was $40,000 plus super and had not changed during his period of employment. He never had a performance review or warning, and to meet deadlines, frequently worked overtime and on weekends.
What then happened
In March 2013, without any preliminary announcement, the company hired a Senior Production Manager who would be Paul’s boss. Paul was naturally concerned that his job was at risk, but he was assured that it was not.
Paul took 8 weeks annual and long service leave In January 2014, . On his first day back, the Senior Production Manager called him in for a meeting without telling him what it was about. He entered the room to be faced by the company’s Procurement Manager and Financial Controller.
They told the Senior Production Manager his presence was not required, and advised Paul that while he was away, the Senior Production Manager had learnt his role and therefore he had become redundant.
He was handed termination papers which outlined his severance payment for the redundancy. Based on his 16 years’ service, Paul was entitled to 12 weeks redundancy pay. He was also entitled to 5 weeks notice of termination, including an extra week because he was over 45, and received his accrued but unpaid annual and long service leave.
He was escorted off the premises, asked to hand in the keys to his company vehicle and provided with a Cabcharge for his fare home.
What could we do for Paul?
Paul approached us feeling that he had been very unfairly treated and that the company was simply trying to save costs by having 1 manager carry out 2 managers’ roles. He also felt that his period of service and good record meant that his employer should have acted more reasonably in terminating him.
We advised Paul that he would have good prospects of success in running an unfair dismissal case with the Fair Work Commission.
Why could we claim unfair dismissal?
The two arguments for unfair dismissal were that the employer had no valid reason for the dismissal as the redundancy was not genuine, and that Paul had been denied procedural fairness.
In this case, the redundancy was not genuine because:
- Paul’s role and duties had simply been given to the Senior Production Manager.
- The employer had failed to comply with the consultation requirements under the relevant award
- The company did not consider any redeployment alternatives.
Paul was denied procedural fairness because:
- He was not notified of the reason for why he was selected for redundancy until after the decision had been made, and not given the opportunity to respond beforehand.
- He was simply told that he was terminated due to redundancy.
- He was not told what the meeting was about in advance so he could not prepare,
- He was not given the opportunity to have a support person present.
In addition, Paul’s employer breached the modern award by making a payment in lieu of notice instead of allowing him to work out his notice period and look for other work.
How was this handled?
Paul lodged an application for Unfair Dismissal with the Fair Work Commission and sought an order for reinstatement as well as compensation for the period he was out of work.
He also filed a complaint with the Fair Work Ombudsman for underpayment of wages as he had never received a pay increase and could claim for unpaid overtime.
In confidential phone conciliation, Paul’s employer declined to offer him his job back. However we were able to negotiate a settlement where he received 16 weeks’ pay and a statement of service. He also signed a deed of release containing mutual non-disparagement and confidentiality clauses.
For all queries about unlawful dismissal, redundancy, or complaints to the Fair Work Commission or the Ombudsman, call JFMLAW on (02) 9331 0266 or send an email to firstname.lastname@example.org.