Caught in crossfire, employees cry unfair dismissal
The Fair Work Commission (FWC) recently dealt with the dismissal claims of a group of workers who said they were unfairly terminated over an internal company dispute.
They claimed the problematic relationships among the directors negatively affected the employer’s workforce. They added that they were also forced to choose sides or risk being dismissed.
The said applications were filed by Rerkrit Hongnipon, Rerkchai Hongipon, and Wei Wei, against their former employer, Total Fire Stopping Pty Ltd.
The termination of employment for each applicant occurred on August 18, 2023, and the workers provided details regarding the events leading to their termination via email on the same date.
‘Internal dispute among company directors’
Wei stated that around June 2023, he became aware of “an internal dispute among the company directors,” wherein one director, “Mr. Chen,” sought his support against the other.
Allegedly, Chen threatened him with job loss if he did not cooperate, subjecting Wei to discriminatory behaviour, and criticising his work performance. Wei argued that Chen terminated employees to transition them selectively to a new company under his control.
On the other hand, the other two workers (both “Hongnipon”) testified to changes occurring at work around the same time. They described meetings with Chen, where they were asked to surrender company property, work from home, and refrain from interacting with specific clients.
They also said they were directed to acknowledge Chen as the sole authority or contact point for the company. Rerkchai Hongnipon claimed his work email access was disabled, feeling pressured by Chen to resign.
Meanwhile, Rerkrit Hongnipon mentioned delays in wage payments and the provision of pay slips in July 2023. They believed Chen terminated the workforce to transfer selected employees to a new company.
Company had to close down?
According to records, the termination without notice on August 18 was unexpected for the workers. Chen, representing the employer, gave context about the alleged internal dispute, which included the freezing of the company's bank account by another director and the ensuing financial strain preventing timely employee payments.
He claimed efforts to remove the other director resulted in ongoing court proceedings. Chen also denied transferring employees to a new company, stating that all employees were terminated simultaneously due to the necessity of the company ceasing operations.
He insisted that, despite the difficulties, he had informed employees about the internal dispute, consulted them, and expressed confidence in the company's ability to continue normal operations. However, the workers argued that this position contradicted with their termination.
"At the time of the dismissals, the [employer] no longer required the workers' jobs to be performed by anyone because of changes in the operational requirements of the employer’s enterprise," the FWC said.
"At that time, [it] was unable to access company funds. It could not pay creditors, including its employees. In those circumstances, it could no longer trade. Redeployment was [also] not an option."
"The evidence was that the business of the [employer] shut down in its entirety. No employees transferred to any associated entity of the [employer] and there was no evidence that redeployment to such an entity was a reasonable or even viable option," it added.
Dismissed over directors’ dispute
However, despite the company’s financial situation, the FWC considered its failure to consult its employees.
“[The workers] were told by email on 18 August that their employment had come to an end, effective immediately. There was no notice and no discussion as required by [their agreeements]. Nor was there any consideration, prompt or otherwise, of matters raised by employees about the changes. The changes had already been put into effect,” it said.
“[They] were dismissed because of the dispute between the directors, which had resulted in company funds being inaccessible. The [employer] was unable to continue to trade. The [workers] were not dismissed for any reason related to their capacity or conduct.”
Company failed to consult its workforce
“There was a clear failure on the part of the [employer] to adequately consult about major workplace change. Consultation may not have altered the ultimate outcome of termination but the failure to consult had the effect that the [workers] found themselves unexpectedly out of work.”
“This lack of consultation and information worked harshly against them. It would have been a relatively simple step for the [employer] to keep its workforce fully apprised of the situation,” it said.
“That situation was serious, and the [employer] would have known that the termination of the [workers], if not the entire workforce, was a likely outcome,” it added.
Thus, the FWC said that the workers’ collective dismissal was harsh and unjust. It then ordered the employer to pay them proper compensation.
