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Failure to consult during COVID-19 results in unfair dismissal

21 August 2020
A failure of a financial services partnership to properly consult with an administrative assistant before her employment ended by way of redundancy has resulted in a finding of unfair dismissal.  


The employee was informed by the employer in a meeting that COVID-19 was having a significant impact on the business. She was shown calculations which demonstrated that she would be better off financially if she did not remain in employment and instead received JobSeeker. The employer informed the employee that this was why her position had been selected for redundancy and she was provided with a letter indicating her employment would terminate on 3 April 2020. 

Concessions by the employer

The employer accepted it did not comply with its obligations to consult under the Clerks – Private Sector Award 2010 (Clerks Award), including to provide information in writing to the employee about the changes, the expected effect on the employee and any other matters likely to affect her. The Fair Work Commission (the Commission) stated that the purpose of providing such information in writing to employees is to give them an opportunity to make sensible suggestions and ask relevant questions. Further, during the meeting, the employer did not discuss measures to avoid or reduce the effects of the changes on the employee. 
The employer also accepted it did not ask or suggest to the employee that one potential option to reduce the adverse effects of the changes on her was for her to reduce her days of work from three days a week to two days. 


Accordingly, the Commission found the dismissal was not a "genuine redundancy" under the Fair Work Act 2009 (Cth) and further that the dismissal was harsh, unjust and unreasonable because the employer failed to comply with its consultation obligations under the Clerks Award. 

The Commission noted that a failure to consult does not always mean a dismissal will harsh, unjust and unreasonable. In some cases, if consultation had occurred it would make no difference to the outcome. However, this was not such a case. The Commission found that if consultation had occurred, the employee would have remained in employment and received the JobKeeper allowance, rather than being dismissed.


In terms of remedy, the Commission found that if the employee’s employment had not ended when it did, her employment would have ended by way of redundancy on 18 May 2020, due to the closure of the employer's Taree Office. The employee was awarded compensation of $3,181.01, which included an allowance for a period that she would have received the JobKeeper allowance had her employment continued until 18 May 2020. 


It may be tempting in the current environment to avoid consultation or to not provide employees with an opportunity to respond (in the belief such procedures will not alter the outcome), however, from a risk management and “employer of choice” point of view, these processes should always be undertaken.

Rachael Freebairn v Dandiie Pty Ltd ATF the DM & IT Moore Family Trust, TJL Business Advisors Pty Ltd ATF the Lumtin Family Trust, and Profitwatch Pty Ltd ATF the Rosemark Trust T/A TJL Business Advisors and Accountants [2020] FWC 3915 (27 July 2020).

If you require further information or have any queries in relation to this legal update, please contact Mark Curran or a member of our Employment team. 

Further Reading