The business case held up and redeployment was ruled out - so how did this dismissal still fail
A cosmetics maker had a sound case for redundancy. One missing step made the dismissal unfair.
The Fair Work Commission has reminded employers that a strong business case for redundancy is not enough on its own - skip consultation, and the dismissal can still be found unfair.
In a decision issued on July 16, 2026, the Commission found that an Australian cosmetics and personal care manufacturer, Cosmetic Laboratories (Aust) Pty Ltd, unfairly dismissed a quality control officer, even though it accepted the role was genuinely no longer needed and that there was no reasonable option to redeploy him.
The worker joined the company as a casual in February 2023 and became a permanent quality control officer in July 2023, checking product quality, production processes, packaging, hygiene and staff attire.
By 2025, the business was under financial strain. On the evidence before the Commission, it had recorded a loss of more than one million dollars in 2024, a cash management loss of $92,000 in the first quarter of 2025, and a residual balance of $35,973.76 at the end of the year. In May 2025, staff were told the company was considering a restructure and would operate under a "low budget strategy" to reduce costs, particularly labour costs. After a review between June and August, it decided the standalone quality control role was no longer required. On September 1, 2025, the worker was told at a meeting that his position was redundant, effective immediately.
He challenged the dismissal, arguing the redundancy was not genuine, that he was not properly consulted or given a chance to respond, and that, given his quality control and production experience, he could reasonably have been redeployed.
What makes the decision instructive for HR is how the Commission assessed the employer's case. It accepted the operational reasons as, in its words, "rational and convincing," supported by the company's financial evidence. It found the job was genuinely no longer required as a standalone role, with its duties redistributed so the position no longer existed - a step the High Court has confirmed employers are entitled to take. The Commission was also satisfied that redeployment was not reasonable, as the evidence did not show suitable alternative work.
Yet the Commission found the dismissal unfair.
The reason was consultation. The company had treated the worker's contract as "award free." The Commission found that the Manufacturing and Associated Industries and Occupations Award 2020 in fact applied to him, because cosmetics and personal care manufacturing falls within its coverage. That award requires an employer facing major workplace change to consult affected employees - including giving them all relevant information about the change in writing, for the purpose of discussion.
On the evidence, that did not happen. There was a meeting and a termination letter, but the Commission found no material showing the worker was given the required information in writing for discussion before the decision took effect. It concluded the consultation obligation was not met. Under the Fair Work Act, that meant the dismissal could not be a genuine redundancy - which is what allowed the Commission to consider, and ultimately find, that the dismissal was unfair.
The decision also addressed the employer's small business argument. The company said it employed fewer than 15 people. The Commission accepted this but noted it made no difference: where a small business does not establish genuine redundancy, the claim is assessed under the general unfair dismissal provisions, not the Small Business Fair Dismissal Code.
On remedy, the outcome was modest. Reinstatement was neither sought nor considered appropriate. The Commission found that proper consultation would have taken about one week, and ordered one week's pay - $1,038.99 gross, plus 12% superannuation - to be paid within 28 days. It recorded no findings of misconduct against the worker.
For HR teams, the practical signal is clear. Consultation is not a formality to fold into a single exit meeting. Check which award or agreement actually applies before relying on an "award free" label, complete the written-information and discussion steps the award requires, and keep records - because even a well-evidenced business case may not withstand scrutiny if the consultation step is missing.
