FWC case reveals the expensive consequences of ‘you're fired’ meetings
The Fair Work Commission (FWC) recently dealt with a case where a worker challenged his dismissal after nearly 15 years of loyal service.
The worker claimed he was suddenly terminated without any prior consultation or warning, despite having contributed significantly to the growth of the business from its early days.
In his application, the worker argued that his employer failed to comply with mandatory consultation requirements before making his position redundant.
He argued that he was simply called to a meeting, informed that his position was being eliminated, and then promptly asked to clear out his belongings and return company property.
The employer defended the decision by claiming financial difficulties necessitated reducing staff numbers and that the Small Business Fair Dismissal Code protected their actions.
The worker had been employed at a tile import company since July 2010. When the business was just starting, he was hired as a sales representative.
As the business grew, additional sales representatives were hired, including a third one in August 2024 after the purchase of a second warehouse.
By early 2025, the owner claimed the business was struggling due to slow sales and increased costs. Without warning, on 28 February 2025, the owner called the worker to a meeting, having decided that morning that he could no longer afford three sales representatives.
During this meeting, the worker was told his position was redundant. After discussing termination pay, the worker was required to clear his belongings from the company car.
No written notice was provided until several days later after email exchanges about outstanding payments.
The FWC found the employer had failed to follow consultation requirements in the Storage Services and Wholesale Award 2020, which applied to the business. The Award required employers to give notice of major changes, discuss their effects, and explore ways to reduce adverse impacts.
The Commission stated: "It is clear on the accounts given by [the worker] and [the manager] that [the employer] did not consult with [the worker] before dismissing him. The first communication between [the employer] and [the worker] in relation to his dismissal was on the day he was dismissed."
The owner claimed he wasn't aware of these obligations until after the dismissal, contradicting his other claim that he had consulted with the worker. The FWC also determined that "the Small Business Fair Dismissal Code does not capture redundancy situations," undermining a key element of the employer's defence.
Workplace consultation obligations
While the FWC acknowledged the business had valid financial reasons for reducing staff, this didn't excuse the procedural failures. The Commission noted that being a small business with no human resources specialists had affected the process.
The failure to consult meant there was no opportunity to explore alternatives such as job sharing, voluntary redundancy among other staff, or other cost-saving measures that might have avoided or reduced the impact of the redundancy.
The FWC highlighted that the owner's approach left the worker with "no real opportunity to consider his possible retrenchment and present views and suggestions to [the employer] to avoid or mitigate the adverse impact of the retrenchment."
The FWC estimated that a proper consultation process would have taken approximately four weeks, meaning the worker would likely have remained employed until 28 March 2025. This period was valued at $7,692.31 plus superannuation.
Additionally, the Commission awarded 12 weeks' pay ($23,076.92) to recognise the worker's long service: "This amount was arrived at by reference to the amount payable in redundancy situations in s. 119 of the Act. I use s. 119 as a guide only, noting that as a small business [the employer] was not required to make this payment under the Act."
The additional payment was justified because "the failure of [the employer] to consult and its failure to make efforts to mitigate the adverse impact of its decision resulted in [the worker] being dismissed unfairly in circumstances where reinstatement is not an appropriate remedy."
The FWC highlighted several factors that made the dismissal unfair: "The alacrity with which the dismissal was carried out, the long loyal service of [the worker], and his contribution to growing the business are also factors in finding the dismissal unfair."
The Commission pointed out that many alternatives went unexplored, noting that "many possibilities were available from job sharing with one or other, or both, sales representatives, to delaying the retrenchments to allow [the worker] to find other work, to seeking other savings in the business to avoid retrenchments."
The total compensation of $31,652.93 shows that even small businesses must follow proper consultation procedures during redundancies.
The case demonstrates that while employers may have legitimate business reasons for reducing staff, how they implement these decisions matters greatly under workplace law.
