Dismissing an employee? Read the fine print

Failure to comply with modern award clause renders dismissal unfair

Dismissing an employee? Read the fine print

This employer’s failure to comply with a modern award clause rendered the dismissal unfair.

The applicant was employed as a chef in a South Melbourne restaurant. On 9 July 2020, the restaurant was required to close as a result of the COVID-19 state lockdown.

Two days later, the applicant received a letter from her employer, stating that the latest shutdown and consequent financial costs had forced them to close the restaurant. The applicant was informed that her employment was to be terminated on 16 August, by reason of redundancy.

In October, the applicant saw that the restaurant was reopening via a Facebook post. However, the managers maintained the applicant’s position no longer existed. Further, while the managers had since re-employed two casual bar staff, it was found these employees had no kitchen duties.

The Commission was therefore satisfied that, despite the restaurant’s reopening and the rehiring of other staff, the applicant’s position had not been filled.

To solidify a finding of genuine redundancy, the Commission then considered whether the restaurant managers complied with their obligations under the Hospitality Industry (General) Award 2020. 

Under clause 38 of the Award, an employer must consult employees about major workplace changes, which includes termination. This required the managers to advise the applicant that her position was to be made redundant and discuss “measures to avoid or reduce the adverse effects of changes” on her.

Given the managers did not engage in any such discussions with the applicant, the Commission found they had failed to satisfy the Fair Work Act 2009 s389(1)(b), and therefore the dismissal was not a case of genuine redundancy.

With this, the Commission found the applicant’s dismissal to be unfair. Compensation has been ordered to the applicant, but an amount has not yet been set.

Key Takeaways for HR

  • Employers must comply with all clauses of the relevant modern award or enterprise agreement when dismissing an employee
  • Failure to do so may lead to a finding of unfair dismissal

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