Employer can’t use redundancy to “get rid” of employee

By Portner Press on August 23rd, 2019
  1. Termination of Employment
  2. Unfair Dismissal


Any employer who thinks redundancy can be used as a simple way to “get rid” of an unwanted employee is sorely mistaken.

The sole director of Fortis Products Pty Ltd learnt this when he retrenched an employee he was unhappy with without following any process.

The 57-year-old worker had started at his company as an internal sales person. About seven months into the role, the employer expanded his duties to include:

  • key account management;
  • internal sales supervision;
  • administration office management;
  • HR management;
  • purchasing management;
  • stock control; and
  • warehouse, logistics and transport management.

About six months later, the director sent the employee the following email with the subject line “RE: warning”:

“We are not making any money at present and I will need to cut back on staff soon.

At present I am not seeing any value you are adding to the company. You cost me a total of $130,000 per year out of my pocket.

There are so many tasks that you have been given the opportunity to carry out effectively including internal sales, stock control, scheduling, HR, etc. and I am getting feedback from everywhere (and most importantly the customers) that you are not performing to their expectation. Steel purchasing is one exception however this only takes max 2 days out of the month for someone to do.

Steel purchasing should be only be 10% of your total time and reducing to 5% soon and then handing over the simple tasks to a junior.

I am giving you an opportunity to turn this around but I cannot take too long as I must reduce total labour cost very soon.

Don’t think product costing and steel purchasing are a full time position. Up until you joined I did both these tasks and it took up 5% of my total work time and I am happy to take them back as they are extremely simple tasks for me to carry out.

You can call me anytime to discuss.


Two days later, the employee responded as follows:

“Firstly I have been doing things as necessary to keep the wheels turning but have not communicated that to you.

I want you to know that I am on your side and will work closely with yourself and Ivo to align my efforts with whatever is required to make the business succeed. It is my intention to have a strong working relationship with you, one that is good for the business.

I’m adaptable, not perfect, always learning and endeavour to be dependable, trustworthy and honest. This can be demonstrated in part by my zero lost time, the additional 900 plus hours I have put in outside normal hours and the generation of records that are transparent to you. There is no way I would be putting in that extra time if it wasn’t constructive.

I am also pleased to have Ivo on board and the stability that will bring to the office.

Happy to discuss. My goal is to utilise my efforts to help the business to succeed.


The director did not respond to this and did not have any further discussion with the employee about the subject of cutting back staff, either verbally or in writing.

About two and a half months later, the director approached the employee about the business being overstocked, saying words to the effect of “Because of f—ing you, I have to go and find millions of dollars. It’s your fault. What have you got to say? If you don’t admit it and say how sorry you are, I’m going to fire you right now!”

The employee then apologised. The director responded with words to the effect of “You come in and work through the Christmas break in your own time and fix it”.

The employee then said he hadn’t taken any time off work since he started with the company more than a year earlier. “Well you think about it because I’m going to think about firing you if you don’t,” the director said.

The employee did not work through the Christmas break.

In January, the director telephoned the employee about a customer order that had been entered in late, telling him he was an “f—ing muddle head”.  When the employee tried to respond reasonably, the director hung up on him.

The day after, the company’s site manager informed the employee that his employment was terminated with effect that afternoon. The director “had it in for you and just wanted to get rid of you”, the manager told the employee.

The following day, the employee received a separation certificate, which stated the reason for the separation being “Shortage of work”.

However, in the Fair Work Commission (FWC) unfair dismissal hearing, Deputy President Tony Saunders found that the redundancy was not genuine because:

  • The employer could not supply any evidence of a downturn in work at the time of the employee’s dismissal.
  • The verbal conversations the director had with the employee indicated that the real reason for the termination was over frustration with the employee’s work performance.
  • The employee simply being told that the director “had it in for [him]” when he was dismissed demonstrated that he was given no reason for his dismissal.
  • The director had no further discussion with the employee about the “need to cut back staff” after the employee responded to his email.
  • The director had employed another part-time casual employee on a permanent full-time basis shortly before the employee was made redundant. This called into doubt the validity of the employer’s contention that there was a downturn in business prior to the dismissal.

Deputy President Saunders found that the employee’s dismissal was harsh, unjust and unreasonable and ordered the employer to pay him $20,000 in compensation.

When it comes to employment law, no employer can afford to be erratic

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