Commission agrees that the employer's financial position was ‘not sustainable’ and urgent action was needed
A head coach challenged his dismissal, arguing redundancy was not genuine because the position still exists with duties carried out by other staff and volunteers, no proper consultation occurred, and a redeployment offer at half salary was not reasonable.
The worker contended that the salary was a deliberate and financially supported decision based on the club's revenue and stable financial position at the time of hiring.
The employer maintained that the club's financial position was not sustainable and urgent action was needed to reduce expenses, the worker's salary was the highest expense identified, and the worker's position at the current salary was made redundant with the option to redeploy at a lower salary closer to the award minimum.
Employment and financial difficulties
The employer was a community swim club that had been operating since 1991, managed by a volunteer board of committee members. The worker commenced employment in April 2024 in the position of head coach with an annual salary of $110,000.
His salary and conditions of employment were negotiated with a committee comprised of members who were replaced in August 2024 with a new committee. The president and treasurer, who commenced in their volunteer roles on the committee in August 2024, gave evidence that there was a very slow handover from the previous committee, and they had a tough time getting access to the necessary systems and information, including access to the employer's financial records.
The financial records were only brought up to date on 21 May 2025, and once those records had been reviewed by the committee, it was "abundantly clear that the financial position of the employer was not sustainable and urgent action needed to be taken".
On 21 May 2025, the committee reviewed the club's financial position and, based on the advice of the club's bookkeeper and treasurer, the club determined that it was financially unviable for it to continue to operate unless it was able to reduce its expenses.
Both the president and the treasurer stated they did not want to be responsible for insolvent trading. In reviewing the club's expenses, the worker's salary was identified as its highest expense, and one that was necessary to reduce.
Letter stated position at current salary made redundant
On 25 May 2025, the president gave the worker a letter stating: "After careful consideration, the club regrets to inform you that we are no longer in a financial position to continue your employment as Head Coach at the current salary. While your expertise and leadership have been of great value to the club, the financial resources required to support a coaching role of your calibre are unfortunately beyond our current capacity.”
“This decision has been made solely to ensure the long-term sustainability of the club and is in no way a reflection of your performance or commitment. Consequently, we are making the Head Coach position at the current salary redundant. While the position of Head Coach will still be required, it will have a much lower level of remuneration, which is closer in line with the minimum entitlements under the Fitness Industry Award 2020," the employer added.
The letter continued: "You are of course welcome to be redeployed to this new position with the lower salary, but we understand if you do not wish to be. We would like to discuss this option with you if you are open to it. If you choose not to be redeployed your employment will end by way of redundancy. In accordance with the terms of your employment contract, you are entitled to a notice period of three weeks. The notice period commences on 25 May 2025. The final date of your employment is 14 June 2025, unless you choose to accept redeployment on or before 14 June 2025. If you choose to accept redeployment, then the new rate will start on 15 June 2025."
On 26 May 2025, the worker responded in writing, rejecting the offer of redeployment and indicating he would be seeking legal advice. The treasurer met with the worker on 29 or 30 May 2025, during which he attempted to give the worker a letter. The letter stated: "As stated in the redundancy notice of 25 May 2025, the club is not in a financial position to pay a person of your calibre the salary you are currently receiving.
Therefore, as a committee, we made the extremely difficult decision to make the Head Coach position at the current salary redundant. For the 12 months to 21 May 2025, the club made a loss of almost $50,000. The average loss per month for the quarter ending 31 March 2025 was $4,533.53.
At this current rate of loss, the cash asset that the club holds could be depleted by as early as late August, with the club having to declare that it is insolvent and cease operating. The club's current wages expense, not including superannuation, exceeds the squad fees for the period 21 May 2024 to 21 May 2025."
The worker refused to take the letter, so the treasurer sent him a copy by email the same day. On 3 June 2025, the worker notified the employer that he had commenced proceedings. On 4 June 2025, the employer issued a further letter to the worker reiterating the reasons for the decision.
The worker was issued with a termination letter on 14 June 2025 stating: "On 25 May 2025, you were notified that your employment would end on 14 June 2025 at the end of shift unless you accepted redeployment to the new head coach position on or before 14 June 2025. In your letters of 25 and 29 May 2025, you clearly state that you do not accept the new Head Coach role with the attached salary and package. Your employment will end immediately. This is because you have not accepted redeployment to the new head coach position, and your notice period has ended."
Worker argued redundancy not genuine
The evidence of the treasurer was that since the worker's termination, the club had not employed any new coaching staff and had utilised its casual and volunteer coaches to fill the position. He confirmed the club did not have the means to employ a new head coach on a salary equivalent to the worker's compensation.
The worker gave evidence that he considered the redundancy was not genuine, there was no consultation, and the offer of redeployment was not reasonable. He also gave evidence as to the significant growth experienced by the club in terms of membership and performance outcomes since he commenced in the role.
The worker said his salary was a "deliberate and financially supported decision, based on the club's revenue and stable financial position at that time". He said he had been advised by the previous committee that the club needed around 110-120 members to be financially sustainable, and the club had 140 members at the time of his redundancy.
He argued that the redeployment offer at half the salary, being $65,000, bore no resemblance to the duties or responsibilities of a head coach and so could not be regarded as genuine redeployment. Because the head coach position still exists, argued the worker, it could not be a genuine redundancy, as the duties were being carried out by other staff and volunteers. He said this confirmed that the role itself was not eliminated, but merely reassigned.
Genuine redundancy found
The Commissioner noted that in considering whether an employer "no longer requires the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise", it was well established that the test could be met when job functions were retained but were redistributed.
An employee's job may be genuinely made redundant when the employee's duties, or aspects of them, are still being performed by other employees. The test was whether the job previously performed by the employee had survived the restructure or downsizing, not whether the duties had survived in some form.
The Commissioner found that consideration of whether the employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the enterprise did not involve a merits review of the employer's decision to make the person's job redundant. It was not to the point that it may have been open to the employer to make a different operational decision, which may have allowed the relevant employee's job to be retained.
What the Act required was for findings of fact to be made as to whether, firstly, the employer had made the decision that the relevant employee's job was no longer required to be performed by anyone and, secondly, whether that decision was made because of changes in the operational requirements of the enterprise.
Having considered the evidence and submissions, the Commissioner was satisfied and found that the worker's role with a salary of $110,000 no longer exists and had not been replaced. There were clear changes in the operational requirements, which were the financial position of the club. It was reasonable and appropriate for the club to reduce its costs, particularly to avoid the risk of trading while insolvent.
The Commissioner was satisfied that the employer met its obligations to consult. It gave written notice to the worker on 25 May 2025 in addition to the other correspondence. Further, the treasurer met with him to discuss the situation. Overall, the Commissioner was satisfied that the club took reasonable steps to consult with the worker, including explaining its financial position.
The worker was offered redeployment involving a reduced salary, which he declined. There was no evidence of other alternative positions to which the worker could have been redeployed.
The Commissioner was satisfied that the worker's employment came to an end due to genuine redundancy. As a result, the worker was not an employee who was protected from unfair dismissal, and the application was dismissed.
