FWC examines whether business divestment constituted genuine redundancy
The Fair Work Commission (FWC) recently dealt with a jurisdictional challenge to an unfair dismissal application, where an employer successfully argued that a worker's termination constituted genuine redundancy following a business sale.
The worker, who had been employed as a state manager for over three years, lodged his unfair dismissal application in March 2025 after his employment ended in February.
He argued that proper consultation procedures had not been followed and questioned whether his dismissal truly qualified as genuine redundancy under the Fair Work Act 2009.
The worker raised concerns about inadequate notice, lack of follow-up consultation, and the employer's failure to provide additional benefits beyond legal minimums.
The worker had been employed as state manager with Circles Australia Pty Limited since March 2021, earning a base salary of $126,600.01 plus bonuses, commission payments and share options.
His role involved developing and maintaining commercial relationships with dealers in Victoria and Tasmania who would then resell the employer's mobile phone plans.
The worker performed duties both "on the road" and in the office, and was not part of a call centre operation.
The employer operated as a mobile virtual network operator business selling SIM-only mobile phone plans. The worker reported to the country manager and had supervised one other employee until September 2024.
His contract of employment required two months' written notice for termination by the employer, or payment in lieu.
In late 2024, the employer and its parent company Circles Life Asia Technology Pte Ltd entered negotiations to sell the Australian business to Amaysim Australia Ltd, part of the Optus Group.
These negotiations were conducted on a commercial-in-confidence basis until regulatory approval was obtained. The Foreign Investment Review Board gave its approval for the sale on or very shortly before 20 January 2025.
On 20 January 2025, the employer held a conference call with employees including the worker to announce the business sale.
The country manager and a director from the parent company informed staff that the employer had sold the Australian business, would be exiting Australian operations, and that employees would be made redundant.
On 23 January 2025, another video conference meeting confirmed that "Amaysim would not be offering employment to the [employer's] employees and consequently the employees, including the [worker], would be made redundant effective on 28 February 2025."
Following the redundancy announcement, the employer sent the worker a proposed settlement deed on 23 or 24 January 2025.
This initial deed contained full releases but "curiously provided for no additional employment benefits beyond those which were lawfully payable under the National Employment Standards and the contract of employment."
The deed included recitals stating that the employer had "entered into an agreement to sell its mobile virtual network operator business in Australia" and that there was "no alternative to [worker] leaving the employment."
The worker responded on 3 February 2025 with concerns about the redundancy process. He noted he had not received formal written notice under his contract, had received no follow-up consultation, and requested the employer stop sending daily automated reminders to sign the deed.
The worker also sought additional benefits including extra redundancy pay, cash bonuses for unvested share options, and additional salary payments.
The automated email notifications continued arriving at 3:00am on numerous dates after the worker received the deed. The employer, while expressing understanding that the notifications were not ideal, was unable to turn off this default function despite the worker's requests.
On 7 February 2025, the employer rejected most of the worker's additional benefit requests but agreed to amend the deed to provide pro-rata vesting of employee stock options for the period between 1 July 2024 and 28 February 2025.
The worker obtained a medical certificate on 11 February 2025 for three weeks but continued working until 18 February 2025 to help dealers finalise commission payments.
He then took paid personal leave until his employment ended on 28 February 2025, receiving accrued annual leave, seven weeks' redundancy pay, and payment in lieu of the remaining notice period. The worker ultimately declined to sign the revised settlement deed.
Whether the Telecommunications Services Award 2020 applied to the worker's employment became a key legal issue.
The worker argued it did, while the employer disputed coverage. This determination was crucial because award coverage would trigger specific consultation obligations under section 389(1)(b) of the Fair Work Act 2009.
The FWC found that while the employer operated in the telecommunications services industry as defined by the award, the worker's role didn't fit within any classification listed in the award's coverage provisions.
The award covers three streams: customer contact, clerical and administrative, and technical roles.
The FWC explained that "the [worker's] employment does not fall within any of the classifications in the technical stream which entail technical tasks in the nature of cabling, installation of equipment, planning of customer network infrastructure."
His role also didn't match clerical positions, as "the role definition and indicative tasks of the clerical and administrative employee level 5, the highest classification in the clerical and administrative stream, makes no reference [to] the principal role and task of the [worker], which was a sales function."
The FWC also found his work didn't fit customer contact roles, noting "the classifications in the customer contact stream are referrable to roles in a call centre environment. The [worker] did not work in a call centre."
Even assuming the award applied, the FWC analysed whether consultation requirements were satisfied. The award requires employers to give notice of changes, discuss effects with employees, provide relevant information, and promptly consider matters raised by workers.
The FWC found these obligations were met through the January conference calls, email communications about the business sale, and the employer's responses to the worker's concerns.
Under section 389 of the Fair Work Act 2009, genuine redundancy requires that the employer no longer needs the job performed due to operational changes, consultation obligations are met where applicable, and reasonable redeployment isn't available within the employer's enterprise or associated entities.
The FWC found the business sale clearly satisfied the operational requirements test: "The sale of business constituted or generated a change in the operational requirements of the [employer] because it no longer operated the Australian business. Because of that change, the [employer] no longer required the [worker's] job to be performed by anyone."
Regarding redeployment opportunities, the FWC noted the worker "did not contend that it would have been reasonable for the [worker] to be redeployed within the [employer's] enterprise or an associate entity. This was no doubt because the [employer] had sold the Australian business."
The FWC concluded: "I am satisfied that the [worker's] dismissal by the [employer] effective 28 February 2025 was a case of genuine redundancy within the meaning of s 389 of the Act."
