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May 2021

It is not a genuine redundancy if there is no consultation

It is not a genuine redundancy if there is no consultation

The Case

Sposito v Maori Chief Hotel (2021)

In July 2020, during the COVID-19 pandemic, Maori Chief Hotel (MCH) made Ms Sposito’s chef position redundant. MCH advised Ms Sposito that it was closing the business and did not expect to reopen until a vaccine for COVID-19 became available. However, in October 2020, MCH began advertising for chefs. Thereafter, Ms Sposito commenced unfair dismissal proceedings in the Fair Work Commission (FWC), claiming her position was not redundant.

The Verdict

MCH claimed the dismissal was a case of genuine redundancy, that Ms Sposito’s role was not available and the advertisement was premature. In reality, MCH had only reengaged two casual bar staff who did not work as chefs. While the FWC accepted that Ms Sposito’s role no longer existed, it found the employment termination was not a genuine redundancy, as MCH had not followed the consultation requirements under the Hospitality Industry (General) Award 2020 (the Award), rendering the dismissal unfair.

The FWC indicated that the whole purpose of consultation was to enable an employee to reduce the personal impact of the redundancy and offer alternatives to termination.

The FWC made it clear that an inability to meet with an employee face to face did not absolve an employer of its obligation to consult in circumstances of a redundancy. This could be accomplished by telephone, video link or in writing.

Ms Sposito was awarded 2 weeks’ pay as compensation, being equivalent to the estimated duration of the consultation period.

The Lessons

This case shows that even in a pandemic, the FWC will not condone circumventing the consultation requirements for a redundancy. Alternatives to face-to-face consultations must be put in place where a meeting in person is not possible.

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