Dismissal of an employee in the case of genuine redundancy is exempt from Fair Work Act 2009 (Cth) unfair dismissal laws.
This requires the Fair Work Commission (FWC) be satisfied that:
- the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
- the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy; and
- it would not have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.
When a human resources consultancy retrenched three employees in around late March 2020 and as a result of shutdowns ordered by the government in response to the COVID-19 pandemic, one of the retrenched employees brought an unfair dismissal claim to the FWC.
In the FWC’s determination of the claim (Browne v MySharedServices Pty Ltd (2020)) the FWC accepted that, due to the employer experiencing a substantial decline in sales, it no longer required the role performed by the applicant to be performed by anyone because of changes in the operational requirements of the business.
However, the FWC considered that the employer’s failure to consult and its decision to employ two further sales consultants in May 2020 was telling that there may well have been opportunities for the applicant to be redeployed.
The employer’s clients did not cease trading. Whilst the circumstances at the end of March 2020 did look bleak for the employer, business has clearly picked up since.
The FWC ruled that when the applicant was retrenched the employer was aware of the nature of the operation of the JobKeeper scheme. Given the purpose of JobKeeper was to ensure employees and their employer maintained a relationship, to minimise job losses and minimise redundancies, the employer should have used this scheme to maintain its employment of the applicant. On this basis, the FWC was satisfied the dismissal was harsh and unjust.