Manager made redundant while on leave: Is it unfair?

Manager says her employer suddenly logged her out of company accounts

Manager made redundant while on leave: Is it unfair?

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who was made redundant by her employer. The worker, who was employed as an office manager, claimed that the redundancy was not genuine and that the employer, a small business with 12 employees, did not follow the Small Business Fair Dismissal Code.

The employer, on the other hand, argued that the dismissal was a genuine redundancy and was consistent with the Code.

In this case, the worker was made redundant while she was on annual leave between 25 January 2024 and 16 February 2024. Upon her return to work on 19 February 2024, she was informed of her redundancy in a meeting with the employer's director and an external representative from an accounting and tax agency.

However, the worker argued that she was not consulted about the redundancy and that there was no genuine consideration of redeployment.

Background and context

The worker started working on 16 August 2021 as an office manager. Prior to her annual leave, the worker was informed by a junior employee that she was not required to perform her usual duties, such as payroll, while on leave and that these duties would be performed by an employee of the external agency until she returned.

On 7 February 2024, while the worker was still away, the employer's external representative contacted the worker to obtain her work passwords.

The worker claimed that the representative spoke to her rudely and threatened to come to her home if she did not comply with the demands. Following this call, the worker's access to her work emails, accounts, and company fuel card was removed.

The worker argued that the external representative's conduct on 7 February 2024, on instructions of the employer, indicated that they had already determined to terminate her employment.

She said that this was the beginning of the termination process and that she was not given an opportunity to consult or be informed about the employer's consideration of her redundancy.

The worker also claimed that she was very unwell heading into her return to work on 19 February 2024 due to the conduct of the employer and the external representative, which caused her significant stress and anxiety.

Upon her return, she noted that her desk had been taken by the external representative, who handed her the redundancy letter without allowing her to contact the employer's director or retrieve her personal belongings.

Employer’s defence

The employer submitted that on 7 February 2024, it had reviewed its operational requirements with assistance from the external agency as to its administration and accounting functions.

As a result, the employer determined that it would restructure itself and that the worker's role would be subsumed by their existing relationship with the agency, with some other work being performed by another existing employee.

The employer provided a witness statement from its director, who stated that he had met with the external representative on 7 February 2024 to discuss the duties performed by the worker and the existing services provided by the agency.

The director claimed that the external representative provided a list of services and a fee estimate, which included the existing services performed by the agency as well as most duties ordinarily performed by the worker.

The director then determined that the employer would make the worker redundant and engage the agency to fulfil her duties.

Complying with the worker’s award requirements

The Commission found that the employer had failed to comply with its obligations under clause 38 of the Clerks - Private Sector Award 2020, which required consultation with the worker about the major workplace change.

The Commission stated:

"It was conceded by the witnesses for the employer that a letter of termination was prepared, and on the day the worker returned to work from annual leave on 19 February 2024, she was advised that her employment was terminated, and she was handed the termination letter."

The Commission also noted that the worker was denied any opportunity to attempt to mitigate the adverse impact of the decision to terminate her employment, as required by the award.

"Because the employer did not satisfy the requirements of subsection 389(1)(b) of the Act, the termination of the worker was not a genuine redundancy within the meaning of section 389 of the Act."

The FWC’s findings

The Commission concluded that the termination of the worker was unfair because the employer failed to consult with her about its decision to terminate her employment before putting that decision into effect.

The Commission considered the worker's evidence that her health had been impacted by the manner in which she was terminated and stated:

"I am satisfied having considered all of the matters that I am required to take into account in section 387 of the Act, that the termination of the worker was unfair because the employer failed to consult with her about its decision to terminate her employment before putting that decision into effect."

The Commission determined that a reasonable period to allow the worker to respond to the advice of the decision would have been in the order of two days and that had the employer complied with its obligation to consult the worker, she would have remained in employment until at least 21 February 2024.

"I have concluded that the employer should pay to the worker the amount of $653.85 gross taxed according to law plus superannuation on that amount to the worker's nominated superannuation fund within 14 days of the date of this decision. An order to this effect will be issued separately and concurrently with this decision," the FWC said.

The decision emphasises the significance of adhering to proper consultation procedures when making employees redundant, even for small businesses. Employers must ensure that they comply with their obligations under the relevant awards and legislation to prevent unfair dismissal claims.

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