School cites government policy and genuine commercial needs. Is it unfair dismissal?
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application from a casual English teacher whose employment ended during a significant operational downturn at her language school.
The worker argued that there was no valid reason for her termination as the employer still required English teachers and continued operating.
She contended that the employer did not follow a procedurally fair process, failed to provide adequate consultation, and that the termination was disproportionate given her personal circumstances.
The worker also claimed the process was inconsistent with how the employer handled other staff during the downturn.
However, the employer maintained that the termination resulted from a valid operational downturn caused by a December 2023 Ministerial Direction from the Department of Home Affairs that significantly reduced international student numbers in Australia.
The employer provided evidence showing enrolment numbers decreased by approximately 50% by March 2024, necessitating staff reductions.
The worker was employed as a casual English teacher with the language school from 13 April 2023 until her employment ended on 26 July 2024.
The employer experienced significant operational challenges following a Ministerial Direction from the Department of Home Affairs made in December 2023, which announced a significant reduction of international students in Australia and severely impacted the school's operations.
By March 2024, enrolment numbers with the school had decreased by approximately 50%, which resulted in requiring fewer teachers, including the worker.
The employer provided copies of their rosters during the period of 24 June to 30 August 2024, which confirmed that student numbers decreased from 247 to 174 by the end of August.
The number of classes on offer fell from 21 classes to 11 classes, across both morning and evening classes, with no new staff being employed.
At or around the same time as the worker's employment ended, the employer made significant staff reductions.
The employer also noted that the worker previously worked at its other campus, but due to the operational downturn, the employer now only operated one campus in Perth city centre, with the other campus being closed in December 2024.
The FWC found that the employer was experiencing a genuine operational downturn, stating "I am satisfied [the employer] has demonstrated that it was experiencing genuine operational downturn."
However, the Commission identified significant issues with the consultation process followed by the employer under the relevant Modern Award obligations regarding major workplace change.
The FWC noted that "it is clear that [the employer] had signalled to staff about the industry downturn and that this could affect rostering and hours. However, on the materials currently before me, I am not satisfied the communication could be reasonably interpreted as giving notice of the expected effects on employees, or other matters likely to affect its employees, given what occurred."
There was email evidence of the worker being informed on 18 July 2024 that due to the downturn in teaching requirements for the ten-week block due to commence on 29 July 2024, there would not be scheduled work available for her.
The FWC found that this email was the communication of the worker's termination, but was not satisfied this could have met consultation requirements given the process had already occurred.
The Commission concluded that "consultation from [the employer] to [the worker] regarding the reality of the situation and severity of the impending effects was lacking."
The FWC applied the test under section 387 of the Fair Work Act to determine whether the dismissal was harsh, unjust or unreasonable. The Commission found that while there was a clear reason for termination due to the significant operational downturn, "this is not a reason related to the capacity or conduct of [the worker]" under section 387(a) of the Act.
The FWC referred to the case of UES (Int'l) Pty Ltd v Leevan Harvey, where a Full Bench considered a matter involving an employee made redundant following a business downturn without proper consultation.
The Commission noted that "the majority in UES went on to determine that, as the employee was terminated due to a downturn in business, there was no valid reason related to his capacity or conduct."
The FWC applied the same reasoning, stating that "as the reason was not related to [the worker's] capacity or conduct, in consideration of section 387(b)-(c) of the Act, she could not have been notified of a valid reason."
The Commission found no suggestion that the worker was unreasonably refused a support person at any meeting, and while there had been previous discussions about her performance, this was not a factor in or reason for the termination.
The FWC examined the employer's size and resources in assessing the fairness of the dismissal process. The Commission noted that while the employer was not a small business for the purposes of the Act, "the business does not appear to have meaningful internal human resources management expertise or specialists."
The FWC formed the view that some of the frustration and concern raised by the worker in relation to the process followed was likely due to the lack of experienced human resources management expertise.
The Commission considered the worker's personal circumstances, noting that she "had been experiencing personal hardship in her private life" at the time of her termination, and that the employer was aware of these circumstances.
The FWC found that it did not appear the employer targeted the worker for dismissal due to these circumstances, but considered the personal circumstances relevant to the determination.
Despite identifying deficiencies in the consultation process, the FWC ultimately found that these did not render the dismissal unfair.
The Commission stated that "I am not satisfied that the deficiencies outlined, although not ideal, had any notable influence on the inevitable outcome of the matter. Had a more careful consultation been undertaken it would have been highly unlikely to negate the reasons for and outcome of the dismissal."
The FWC acknowledged that the circumstances were unfortunate, noting that the worker "was a casual employee whose hours were at the mercy of the overall operational requirements of [the employer's] business."
The Commission found that the employer "suffered a significant operational downturn which resulted in a genuine commercial need to reduce staff and hours" and that "on the evidence before the Commission, [the worker] was not unfairly targeted by [the employer] during this process."
Ultimately, the Commission determined that "the dismissal of [the worker] was not harsh, unjust, or unreasonable. It was therefore not unfair." The application was dismissed accordingly.
