Procedurally unsound redundancy found to be unfair dismissal

In a recent decision, although the FWC was satisfied with the redundancy’s substantive merits, the employer’s failure to meet procedural obligations saw it result in an unfair dismissal. The applicant was employed as Head of Community at a childcare and early learning centre and covered under the Children’s Service Award 2010.

The Centre commenced operation on 19 February 2020. Less than two months later, due to the impacts of COVID-19, the Commonwealth government restricted the Centre’s attendance to children of essential workers only. As a result of this decline, the applicant’s work was reduced from five to three days per week. During May, the Centre’s operations manager informed the leadership team (including the applicant) that all operational aspects were under review. On 31 July, the applicant attended a meeting with the respondent, where her employment was terminated, effective immediately.

The operations manager cited the ‘unprecedented economic impact of COVID-19’. She also explained that given the Centre had only commenced operations that February, the government financial support was ‘dramatically lower than more established childcare centres. The applicant contended her redundancy was not genuine but rather an unfair dismissal.

For a genuine redundancy under the Fair Work Act 2009 s 389, the employer must no longer require the job to be performed and must also comply with any obligation in a modern award or enterprise agreement.

The Commission accepted that, given the operational changes brought on by COVID-19, the respondent no longer required the applicant’s job to be performed. However, clause 8 of the Children’s Service Award 2010 sets out consultation obligations, which state that employers must give written notice of major changes that are likely to have a significant effect on employees. ‘Significant effect’ is defined in the Award to include termination of employment.

The respondent relied upon correspondence sent to staff during June and July to demonstrate compliance with this clause. The Commission was not satisfied that this met the Award’s consultation obligations. With this, the Commission found that, under the Fair Work Act 2009 s 385, the applicant was unfairly dismissed. The matter will progress to a directions hearing to determine the appropriate remedy.

Key Takeaways for HR:

• Despite substantive merits, employers must always comply with procedural obligations when dismissing employees
• These obligations may be contained not only within the Fair Work Act 2009 but also within the relevant modern award or enterprise agreement