Employer claims 'genuine redundancy,' misconduct after CFO’s dismissal
The Fair Work Commission (FWC) recently dealt with a worker’s unfair dismissal claim after his employer decided to outsource his role.
The employee was the employer’s CFO on a permanent full-time basis.
A member of senior management raised issues with his performance and said a consultant recommended that his position be outsourced. The employee said he was given a Deed of Release, which ended his employment.
He claimed redundancy payment of four weeks, annual leave, loading, and unpaid wages. He said that “he is owed the four weeks by reference to an email” that the employer sent him.
Essentially, the employee said the employer had not paid the correct entitlements. He claimed compensation for being unfairly terminated without payment.
The employer said its core business is to provide support services, including automated business systems, RTO training, NDIS-approved support and personal development and performance coaching, to care industries.
The employer said the employee’s application is baseless as he failed to fulfil his duties to set up business operations and secure funding for growth.
The employee was tasked with bookkeeping and producing reports, and the employer said his failure to fulfil these duties “had led to significant issues for the company once their technology was rolled out.”
Additionally, the employer also said the employee committed misconduct by “hiring his girlfriend and paying her for two months despite cash flow issues without advising or consulting the employer.”
Did the employer no longer require the employee’s job?
To justify a change in operational requirements that would satisfy a “genuine redundancy,” the FWC explained the criteria.
“Operational requirement is a broad term which encompasses the present performance of the business, the state of the market in which the business operates, steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively and the application of good management to the business,” it explained.
“In considering a whether there has been a reorganisation or redistribution of duties, it is pertinent to consider whether the employee has any duties left to discharge. Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees,” the commission said.
The FWC noted the employer used the phrase “retire the position,” and their intention to outsource the role indicated that his position would be redundant.
The employee was notified about his role “no longer being existent” within the organisation.
The commission said this was “sufficient basis” that the worker was made redundant because his role was outsourced.
The FWC also noted that the employer’s business was a small start-up with around 20 employees. His role “was specialised, and there was no opportunity for him to be redeployed,” the decision said.
Thus, the commission said there was genuine redundancy and dismissed the employee’s unfair dismissal claim.
