Fair Work highlights importance of checking relevant award
The Fair Work Commission (FWC) recently dealt with the case of two managers who were made redundant due to the financial struggles of their employer.
They alleged that they were not properly consulted under their relevant award, which made their dismissals harsh, unjust and unreasonable.
The co-managers, Jason Janus and Marianna Janusova, are spouses and were former employees of Red Star Gold Coast Pty Ltd. They lodged separate appeals seeking redress for unfair dismissal.
They commenced their roles as Motel Managers with the employer on January 24, 2023. However, their employment was terminated on September 1, 2023, due to business restructuring and building renovations. They were provided with one week's notice in lieu of the standard consultation process.
Was there genuine redundancy?
They argued that their redundancy was not genuine, citing reasons such as the existence of other employees performing their duties and the lack of consultation regarding their redundancy.
On the other hand, the employer contended that the redundancy was legitimate and necessary due to operational restructuring, despite acknowledging the failure to adhere to consultation requirements.
During the legal proceedings, the managers requested testimonies from eight employees. However, only five were approved, including four executive decision-makers involved in the redundancy process and a casual receptionist.
The employer’s financial manager provided insights into the financial aspects of the redundancy. She explained the cost-saving measures and operational changes that led to the decision to make the managers redundant.
Operational changes and centralization
Following a formal meeting with the overseas owner in August 2023, the company decided to centralize management operations. This restructuring involved centralizing certain tasks to the Sydney office and redistributing remaining responsibilities among existing employees.
The company then examined the duties of the applicants and determined that certain activities could be centralized or delegated to other employees. The employer emphasized the operational necessity of these changes, citing financial data and operational requirements.
Based on the evidence presented, the court concluded that the redundancy of the applicants was due to operational requirements and not a lack of genuine need for their roles.
Despite other employees assuming certain tasks, the specific responsibilities of the Motel Manager position were no longer required by the company's operational standards.
However, the managers argued that even though redundancy was inevitable, the employer’s redundancy process was flawed.
Failure to consult
The FWC said that employer submitted that the decision to make the Motel Manager position redundant was made on 24 August 2023.
On 1 September 2023, the employer’s operations manager met with Janus and informed him that he and his wife were to be made redundant as a result of a restructure in the business.
The managers’ relevant award required the employer “to give information in writing about relevant changes.” The operations manager met with Janus and provided a letter regarding the restructure and the outcome of termination.
“However, the termination letter that was provided to Janus on 1September 2023 was not for the purposes of consultation [under their award],” the FWC said.
Thus, it ruled that the workers “were not given proper consultation regarding the redundancy,” making their dismissals harsh and unreasonable.
The FWC referred the case for further hearing to discuss the workers’ remedies.
