Worker contests dismissal despite employer's claims of legitimate business pressures
The Fair Work Commission (FWC) recently dealt with a complaint from a housekeeping supervisor who alleged that she was unfairly dismissed.
The case involved a serviced apartment business that terminated the worker's position in May 2025 due to financial pressures, offering alternative casual or part-time roles without guaranteed hours.
The worker contested the dismissal, arguing the employer breached consultation requirements under the Hospitality Industry Award and failed to communicate the redundancy decision properly.
The employer maintained that the redundancy was genuine due to business difficulties and claimed it had attempted to consult with the worker about alternative arrangements.
Employer argues genuine business pressures prompted restructure
The Commission heard evidence that the worker had been employed as a housekeeping supervisor at a serviced apartment complex since November 2020, working 35 hours per week, managing room attendants, rostering, and ordering supplies.
The business owner testified that new hotels opening locally since 2023 negatively impacted operations, leading to the loss of key personnel, including a Property Manager in 2024.
The owner gave evidence that he had been managing the business himself while exploring ways to improve profitability, including taking on additional work and identifying operational efficiencies.
During a May 2025 review of all business roles, he determined the housekeeping supervisor position could be absorbed by existing staff and himself, resulting in permanent cost savings.
The Commission accepted the owner's evidence that the decision to make the role redundant was driven by genuine financial pressures and that the business restructure had improved financial performance following implementation.
The Commission found that the operational changes were legitimate responses to business difficulties.
Commission examines communication and consultation timeline
The Commission found that on 26 May 2025, the owner sent the worker an email described as a formal redundancy notice stating the housekeeping supervisor position would be removed effective 26 June 2025.
The email offered opportunities to discuss alternative part-time or casual housekeeping roles, requesting a response by 3 June 2025.
The Commission noted that the worker responded, asking about guaranteed hours, pay rates, and redundancy entitlements for alternative roles.
The employer replied that as a small business, redundancy pay did not apply and that proposed roles were operationally dependent without guaranteed minimum hours.
The Commission observed that subsequent email exchanges became increasingly tense, with the worker raising concerns about award consultation requirements while threatening Fair Work proceedings.
The employer defended his right to make operational decisions while claiming he remained open to consultation about redeployment arrangements.
Commission determines consultation requirements not met
The Commission determined that the employer's attempts to engage with the worker constituted discussions about redeployment options rather than genuine consultation about the redundancy decision.
The Commission found the Hospitality Industry Award requires consultation to occur before definite decisions are made, involving discussions about proposed changes and their likely effects on employees.
The Commission noted the employer's own written submissions conceded that any consultation could only have extended the transition period or facilitated redeployment discussions, not reversed the structural changes already decided.
The Commission found the language used in communications indicated finality to the redundancy decision when first communicated to the worker.
The Commission emphasised that consultation must involve meaningful discussion before final decisions are made, allowing employee feedback to potentially influence outcomes.
The Commission determined the employer should have indicated he was considering making the role redundant and sought the worker's input before selecting the final course of action.
Commission identifies procedural failures in communication method
The FWC found that, beyond the consultation failures, the employer communicated the redundancy decision via email rather than speaking face-to-face with the worker during their shared workday on 26 May 2025.
The Commission determined this approach was inappropriate for conveying information as serious as employment termination.
The Commission noted the employer justified written communication as ensuring clear evidence of each step and avoiding misunderstandings, but rejected this reasoning.
The Commission found that basic standards of decency required personal discussion with a nearly five-year employee about such significant workplace changes.
The FWC determined that while small business size and absence of human resources expertise may explain some procedural shortcomings, these factors do not excuse failures to adhere to fundamental employment relationship standards when terminating long-serving employees.
Commission awards limited compensation based on consultation period
The Commission awarded compensation equivalent to one week's pay, totaling $1,295.63, including superannuation, after finding the worker's anticipated employment period would have been extremely minimal even with proper consultation.
The Commission determined the redundancy decision was based on genuine operational requirements that consultation would unlikely have changed.
The Commission calculated that proper consultation should have taken approximately one week, potentially extending the employment relationship from 26 June to 2 July 2025.
The Commission noted the worker had successfully obtained alternative casual employment earning $450 weekly, representing more than half her previous income reduction.
The Commission declined to offset the worker's new earnings against compensation, recognising her loss of permanent employment status and significant income reduction.
The Commission concluded that while the redundancy was operationally justified, procedural failures warranted recognition through monetary compensation for the consultation period that should have occurred.
