Payroll glitch or sudden termination?

Employer argues removing worker from system merely 'administrative'

Payroll glitch or sudden termination?

In a recent case reviewed by the Fair Work Commission (FWC), a worker found herself allegedly dismissed after being inadvertently removed from the employer's payroll system.

The employer countered the worker's claim, arguing that the removal from the payroll system was not intended as a termination of employment.

The worker had started as a casual employee at the employer's franchise beauty salon in December 2022. During her shift on May 13, 2023, she informed the salon manager that she had accepted a position at a nearby franchise, potentially impacting her availability for weekday shifts but not her Saturday shifts.

In an alleged friendly conversation on May 16, 2023, the salon manager, acknowledging the quiet season, suggested the worker skip the following Saturday shift, which the worker agreed to.

Following this conversation, there was no further communication between the worker and the salon manager for three weeks. The worker assumed she was waiting for her next scheduled shift during this time.

Worker’s unexpected discovery

Several days later, while updating her income details on "myGov," linked to her Centrelink account, the worker was shocked to discover a termination notice dated May 22, 2023, indicating the end of her employment with the salon.

Unbeknownst to the worker, the employer had removed her from the payroll system for June 2023, anticipating that she wouldn't be required to work due to the slow season.

The employer argued that this decision aimed to save on administrative fees payable to the third-party payroll provider, adding that her removal from the payroll system was an internal administrative act and not a dismissal. It noted that it neither did nor intend to end the worker’s employment.

However, the worker contended that she was dismissed because the employer removed her from the payroll system and failed to inform her about it. Further, she said that she was not rostered for work after 16 May 2023.

HRD previously reported about a casual worker who believed she was fired because she felt ignored by her employer after weeks of recovering from an injury.

FWC’s decision

After examining the case, the Commission dismissed the worker’s application as it found that no dismissal occurred.

The FWC noted that the worker’s removal from the payroll system was indeed an administrative act by the employer since it did not plan to roster the worker for June 2023 and was unlikely to do so because the business was slow.

It also argued that while the worker was not dismissed, it did not automatically mean that the employer handled the matter well.

“The employer should have but did not reassure [the worker] when removing her from the payroll system that she nonetheless remained employed and eligible to be offered shifts,” the FWC stated.

It also advised the worker to exercise a “higher degree of care when deciding to remove casual employees, even temporarily, from the payroll system” to avoid triggering further problems.

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