An employer argued its size should ease the redundancy rules - the Full Bench weighed in
A small tile importer argued its size should soften the redundancy rules. Australia's Fair Work Commission Full Bench firmly disagreed.
The decision, handed down on July 7, 2026, upheld a compensation order for a sales representative who spent nearly 15 years with the company before being dismissed in a single morning meeting.
The sequence was fast. On February 28, 2025, the worker was called into a meeting and told that slow sales meant the business could no longer keep three sales representatives. He was the one going. The conversation then turned to his payout. He handed back the company car keys, and the business owner arranged an Uber to take him home.
The employer, a small business with nine staff, called the exit a genuine redundancy. Under the Fair Work Act, a genuine redundancy is a complete defense to an unfair dismissal claim. But that defense only holds if the employer meets every requirement - including any duty in a modern award to consult staff about the change.
The award that applied here required consultation once the business made a firm decision to implement a major change. The deputy president found that consultation never happened. The business owner acknowledged he had not read the award's consultation clause until he was preparing his response to the dismissal claim - weeks after the event. In a decision issued May 14, 2025, the deputy president ruled the dismissal harsh and unreasonable and ordered the company to pay $31,652.93 in compensation, plus $884.62 in superannuation.
The employer appealed, and its central argument was size. It said the deputy president had placed too much weight on a "technical breach," overlooked its limited HR capacity as a small business, and set compensation too high for a company its size. It also argued that a proper process would likely have ended in the same result.
The Full Bench granted permission to appeal because the size question was novel. It then dismissed the appeal on every ground.
The reasoning is what matters for HR. The Commission held that modern award consultation obligations apply in the same way to all employers, including small businesses. There is no small-business exemption and no reduced standard, and the Commission has no discretion to treat partial or substantive compliance as enough. Technical non-compliance, it held, means the obligation is not met - and an employer that fails to consult cannot rely on the genuine-redundancy defense.
The Full Bench also rejected the argument that the outcome would have been the same regardless. It said that was no answer to the loss of the employee's consultation rights. Consultation, it explained, means a genuine opportunity to influence the decision before it becomes final - not a briefing after the fact.
On compensation, the Commission found no error. The award reflected four weeks for the consultation period that should have taken place, plus 12 weeks tied to the worker's long service. The deputy president had used the redundancy pay scale in section 119 of the Act as a reference guide only, while noting that scale does not legally apply to small businesses.
For HR, the message is direct. If a business has fewer than 15 employees, its modern award consultation duties on redundancy are identical to those of a large employer. Read the consultation clause before acting, not after. Consult before the decision is locked in. Put the required information in writing. And set aside the idea that a business is too small for all this - it is the argument that just failed at the Full Bench.
