2 min read

FWC criticises employer for marching out retrenched employee

In McNichol v Shape Australia Pty Limited (2021), a project manager argued her redundancy was not genuine and therefore unfair. The employee was a project manager working for a construction company that specialises in refurbishment and fit-out. The employer argued that due to the COVID-19 pandemic, market confidence had been severely impacted, and the employer had experienced a significant reduction in sales and projects won since March 2020. It said that as a result, there was a need to reduce its headcount by three roles in Queensland, and the employee’s role was one that was selected for redundancy.

The employee argued the dismissal was not a case of genuine redundancy, as she believed it would have been reasonable in all the circumstances for her to be redeployed within the employer’s business, given there was work available at the time of her dismissal, which she stated she could have performed.

The Fair Work Commission (FWC) ruled it was the employer’s prerogative to determine which roles to make redundant. It had reasonably determined that it only required six project managers in Queensland of the seven that were employed. It was not required, as the employee argued, to return to NSW the three employees who were seconded from NSW to Queensland. If an employer determines that a person’s job is no longer required to be performed by anyone because of changes in the operational requirements of its business, it is not obligated to remove valuable employees from its valuable work simply because they are seconded employees.

The FWC ruled the dismissal was a case of genuine redundancy and therefore could not be challenged as an unfair dismissal. That was because, as at the date of employment termination:

  • the employer no longer required Ms McNichol’s job to be performed by anyone because of changes in the operational requirements of its enterprise;
  • there was no obligation to consult the employee as her employment was not covered by a modern award or enterprise agreement; and
  • it would not have been reasonable in all the circumstances for the employee to be redeployed within the employer’s enterprise or the enterprise of an associated entity.

While the FWC dismissed the unfair dismissal application, it was critical of the employer for informing the employee the day before her employment termination that “we are not firing you”.

The FWC also criticised the employer for denying the retrenched employee the opportunity to go back to her desk to collect her personal items on exit. The employee was walked out the door and her personal items were collected for her.

The FWC considered the employer should address this practice in redundancy cases, as it is “humiliating and unfair where naturally the individual may be shocked at the news of the redundancy, may have important personal items they wish to collect, and may wish to understandably farewell colleagues”.

The FWC considered the employee should be allowed “several hours or so to compose themselves before they then return to their workspace to gather their belongings and bid farewell”. This, according to the FWC, may also be prudent if management is tasked with implementing a number of redundancies across the same day and announcements are strategically made. For example, given the company-wide announcement was made at 3pm, the employee could have been allowed to return and collect her things the following morning. The FWC noted, “the dignity of an individual should not be forgotten in what is often a significant life-altering course of action made by an employer for its employee”.

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