Store manager challenges dismissal, claims role still needed despite business losses
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application where a store manager challenged her termination, claiming it was not a genuine redundancy.
The worker had been employed for over seven years before being dismissed in January 2025 due to alleged redundancy.
The worker argued that her dismissal was unfair and that her role was not genuinely redundant.
She maintained that her job was still required to be performed and contested the employer's claim that operational changes had made her position unnecessary.
The FWC needed to determine whether the dismissal met the legal requirements for genuine redundancy under section 389 of the Fair Work Act before considering the merits of the unfair dismissal application.
The employer operated a small tobacconist retail store in Grafton, New South Wales, selling tobacco products and gift wares.
The business employed three staff members when the worker's employment ended. The worker had served as store manager on a full-time basis for 7.5 years, making her the sole full-time employee, while the other two employees worked casually.
The business owner provided unchallenged evidence of a gradual downturn attributed to decreasing smoking rates, higher cigarette costs, competition from three other local tobacco retailers, and increased illegal tobacco trade.
The illegal tobacco trade was having a particularly significant impact, with the owner stating that the loss in sales due to illegal tobacco was around 75%. By October 2024, the business recorded an operating loss of over $46,000.
The owner and worker met regularly to discuss sales figures and the business downturn. The owner increased his working hours to save on wage costs and concluded before Christmas that he could no longer afford the worker's full-time position, particularly where he could undertake most of her duties himself without paying himself a wage.
The dismissal meeting occurred on 6 January 2025, where the owner told the worker he was going to "have to let you go because I'm financially broke and I cannot afford you anymore."
The FWC examined three key elements required to establish genuine redundancy under the Fair Work Act: whether the employer no longer required the worker's job to be performed by anyone because of operational changes; whether the employer complied with consultation obligations; and whether redeployment would have been reasonable.
The FWC noted that determining genuine redundancy does not involve reviewing whether the employer made the right business decision.
Previous cases have established: "it is 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."
The legal test focuses on whether the specific job still exists after restructuring, not whether individual duties continue.
Previous FWC decisions explained: "What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge."
The worker's primary complaint was that her job was still required, but the employer argued that while her duties remained as inherent retail tasks, no replacement store manager had been employed, meaning the specific job had not survived.
The FWC addressed consultation requirements under the General Retail Industry Award 2020. The employer admitted failing to provide written information about the change as required by the award.
However, the employer argued it had provided relevant information through regular conversations about the business's financial position.
The FWC found the worker was aware of the financial position given her access to information and regular discussions with the owner about declining revenue.
The FWC referenced a previous case where it was established that consultation requirements could be met through regular contact even without written documentation:
"The fact that the company failed to commit the situation to writing as per the agreement does not obviate the regular contact it had with the relevant people and, in its totality, I find it complied with the consultative arrangements."
The FWC was satisfied that consultation requirements were met despite lacking written documentation, finding that regular discussions about financial difficulties constituted adequate consultation under the circumstances.
The final element examined whether redeployment within the employer's enterprise would have been reasonable.
The Fair Work Act states that dismissal is not genuine redundancy if redeployment would have been reasonable within the employer's enterprise or an associated entity.
Given the small business structure with only three total staff members, redeployment options were extremely limited.
The worker was the only full-time employee, with the other positions being casual roles. The FWC found there was no other position available for redeployment at the time her role was made redundant.
The business's financial constraints and operational structure made redeployment impractical. The owner's decision to absorb the worker's duties himself demonstrated the business's reduced capacity to maintain multiple positions while remaining financially viable.
The FWC concluded that the worker's employment ended due to genuine redundancy. The employer had demonstrated that operational changes made the store manager position no longer necessary due to declining revenue and financial sustainability concerns.
The FWC stated: "I am satisfied on the evidence that there was a change in operational requirements which resulted in the [employer] no longer needing the [worker] to fulfil the Store Manager role. The change in operational requirements arose because the [employer] needed to respond to the decline in revenue and downturn in business."
Despite procedural shortcomings in written consultation, the FWC found substantial compliance with award requirements, noting: "I am satisfied that the [employer] gave the [worker] the relevant information required by the Award, albeit not in writing."
Regarding redeployment, the FWC determined: "The [worker] was the only full-time employee. I am satisfied there was no other position for her to be redeployed to at the time her role was made redundant."
The FWC concluded: "As a result, the [worker] is not an employee who is protected from unfair dismissal and her application under s.394 of the Act must be dismissed."
