By Mike Toten Freelance Writer

An employee with almost 15 years’ service was called into a meeting and made redundant on the spot, with no prior consultation. The Fair Work Commission (FWC) found that this amounted to unfair dismissal, even given that the employer was a small business in financial difficulty. It awarded compensation equivalent to what the employee would have received if a correct process had been followed, plus an amount for his long service and contribution to the business. 

 

Facts of case 

The employee, a sales representative, was called into a meeting without prior notice, told his position was redundant and told to collect his belongings, return employer property, and leave immediately. He did not receive any written notice until four days later. 

There was evidence that he had contributed significantly to growth of the business over almost 15 years.  

The employer claimed that financial difficulties had forced it to reduce its sales force from three to two employees, and it had complied with the Small Business Fair Dismissal Code. The business had expanded six months before the employee was retrenched.  

The employee’s award required the employer to give him notice of major business changes, discuss their potential impact and explore ways to mitigate the adverse impact on him. In this case, it could have included job sharing, other cost cutting or voluntary redundancy by another employee. However, the employee received no notice until he attended the “redundancy” meeting. 

 

Decision 

The FWC found that the employer had breached its consultation obligations, and this amounted to unfair dismissal. It awarded the employee compensation of $31,653, comprising four weeks’ pay to cover the consultation process that should have occurred plus 12 weeks’ pay to reflect his long service with the employer. 

 

What this means for employers 

The Small Business Fair Dismissal Code applies only to dismissals, not redundancies. 

Even though this employer had a valid reason (business downturn) to make the employee redundant, it was still required to comply with the redundancy consultation requirements of the employee’s award. If there is no genuine consultation, there is not a genuine redundancy. 

 

Read the judgment 

Mr Carson Q Zhang v Orientile Pty Ltd - [2025] FWC 1336 | Fair Work Commission