Employer argues dismissal due to 'financial difficulties'
A worker recently filed an unfair dismissal claim before the Fair Work Commission (FWC), alleging that his employer took over his job without consulting him.
The worker, Kazuyoshi Goto, worked as a chef at a sushi shop in Melbourne operated by Allen Aus Pty Ltd. In July 2023, Goto's employment was terminated by the business owner, Allen Chen, with the dismissal taking effect the following day.
The worker said his dismissal was unjust, and he is seeking compensation. In contrast, Chen said the dismissal was a valid redundancy because he could no longer afford to hire a chef and decided to take over his responsibilities.
The business faced ‘significant’ financial issues
He said that on 9 July 2023, the day before he was supposed to return to work after a leave period, he received a text message from Chen saying that the company was facing significant financial issues and that he was no longer needed.
He said the dismissal came as a “complete surprise” since there were no prior warnings of the business's financial struggles or that his job was in jeopardy.
The worker said the workload had remained substantial, and his pay, which exceeded the award rate, had been increased just four months earlier.
Goto argued his role was still essential, as the tasks he used to perform, such as food preparation, order-taking, kitchen maintenance, and counter service, were still being carried out.
The worker said that a replacement worker was hired while he was on annual leave. He also noted that after his dismissal, Chen recruited another employee, increasing the employer's workforce.
Consequently, Goto said his dismissal was not genuinely a redundancy and deemed it unfair due to a lack of basis and insufficient notice. He said that he would not have taken leave for a holiday overseas if he knew about his impending termination.
Business owner decided to take worker’s job
Goto adds the unfairness of being dismissed via a text message from Chen, arguing that this process adversely impacted his mental well-being.
He said that if the business was experiencing financial difficulties, Chen should have engaged in a conversation with him, as they might have found another solution.
Meanwhile, the employer explained that since the onset of the COVID-19 pandemic, running his business has been challenging, resulting in substantial financial difficulties.
He said the situation worsened on 1 July 2023 following an increase in employer superannuation contributions, minimum wage, rent, and interest rates.
Due to these financial changes, Chen said that he could no longer afford to employ a chef and had to take on the chef's responsibilities himself, working without rest to cover the workload.
Essentially, Chen said that Goto's dismissal was a legitimate case of redundancy, as the chef position was no longer required. He also said the worker's termination did not violate the Fair Work Act, as it was based on valid reasons, and he could not reasonably redeploy him to another role.
Employer should consult with worker about major changes
In its decision, the FWC found that the employer “no longer required Goto’s job to be performed by anyone.” It said it accepted Chen’s statement “that he could no longer afford to employ a chef and that he would cover this work.”
“This was the change in the operational requirements of the business,” it added.
Despite noting that the employer is no longer able to employ the worker, the FWC said it was “clear that the [employer] did not comply with its obligations under the relevant award to consult with Goto about his redundancy.”
The FWC said the worker’s award required the employer that if it made “a definite decision to make major changes in organisation, structure, or various other matters that are likely to have significant effects on employees (which includes termination), the employer must give notice of the changes to the affected employees and discuss the changes and their likely effect on employees.”
“It is also required to give employees information in writing for the purposes of these discussions,” the Commission said.
It said the employer “did not discuss the effects of the change with [the worker] or provide him with information in writing.”
“It did not undertake any consultation with [him] about its decision to make his job redundant,” it said. Thus, it said the worker was unfairly dismissed and ordered the employer to pay compensation.
