Worker put on forced annual leave amid employer's legal dispute with landlord

Did the company's 'operational challenges' lead to unfair dismissal?

Worker put on forced annual leave amid employer's legal dispute with landlord

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker employed by the Platinum Hospitality Group (Aust) Pty Ltd, which owns and operates a fast food and convenience store business in Queensland called the Loaded Burger.

The case highlights the importance of employers following proper procedures when dismissing employees, even in situations where the business is facing operational challenges.

The worker was employed on a permanent part-time basis from June 3, 2022, until his dismissal on November 17, 2023. The dismissal occurred after the employer ceased trading at the location where the worker was employed.

Background of the case

The worker was employed by the Loaded Burger from June 2022 until his dismissal in November 2023. He mainly worked at the Morayfield location but occasionally worked at the Caboolture location.

In September 2023, the landlord of the Morayfield premises changed the locks, preventing the employer from carrying out its business there.

The worker was informed by the employer that he would be provided with work at the Caboolture store, but according to records, he only worked there on one occasion.

The worker claimed that he was "put on annual leave and told to stay on annual leave until further notice" without being given the option to choose.

Lack of communication and consultation

Despite the worker's requests for information about when he would next be working, the employer did not provide direct answers.

The employer sent a letter to the worker in October 2023, stating that his hours of employment would be reduced in the interim due to the ongoing legal process with the landlord.

The worker continued to receive annual leave payments until approximately November 2023. He believed he still had a job and was unaware of the possibility of his employment being terminated until it actually occurred.

Termination of employment

On November 17, 2023, the worker received an email from the employer notifying him that his annual leave had been exhausted and that his employment was being terminated due to the employer's inability to offer him any employment.

The email stated:

"The reality is, that whilst the ongoing legal battle continues with Cresthaven, we are not in a position to offer you any employment, and as such unfortunately your employment is terminated."

The worker later discovered that the landlord had changed the locks due to the employer being behind in rent for six months and that the legal battle mentioned by the employer had been resolved 2-3 weeks after the locks were changed.

FWC’s consideration

The FWC found that the worker's dismissal was harsh, unjust, and unreasonable. The Commission determined that there was no valid reason for the dismissal related to the worker's capacity or conduct, and the employer had not complied with its obligations under the relevant modern award to consult with the worker about the redundancy.

Furthermore, the FWC accepted the worker's evidence that he was not warned about the possibility of his employment being terminated and was placed on annual leave without his consent.

"In my view, the 'definite decision' which the [employer] was required to consult [the worker] under [his relevant award] was the [employer's] decision to close down one of its stores, because it was this decision which was likely to have a significant effect on [the worker], including termination of employment,” the FWC said.

"I am therefore satisfied that, at the time of dismissal, [the worker] was a person protected from unfair dismissal,” it added.

Consequently, the FWC ordered compensation for the worker, finding that his dismissal was harsh, unjust, and unreasonable.

The Commission emphasised the importance of employers following proper procedures and consulting with employees when making significant changes that may affect their employment.

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