Genuine redundancy or unfair dismissal - you do the meth

Employment Law Update - 24 October 2018

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The Fair Work Commission has found that a Human Resources (HR) manager, who was made redundant after accusing his Managing Director of having an ice addiction, was not unfairly dismissed.

Background to the case

Mr Elton Bizzaca, the former HR and OHS Manager of Westelect Services Pty Ltd T/A Westelect Services (Westelect) made an unfair dismissal application to the Fair Work Commission (Commission). Westelect said that it had dismissed Mr Bizzaca for reasons of genuine redundancy and therefore the Commission had no jurisdiction to deal with his claim.

The first limb of Mr Bizzaca’s case was that his redundancy was not genuine because he had not been consulted in line with Westelect's Employee Collective Agreement (Agreement) and there was no reasonable attempt to redeploy him.

The second limb was that the real reason for Mr Bizzaca’s dismissal was because of a falling out between him and his Managing Director, Mr Adrian Cunningham. Mr Bizzaca alleged that around February 2018, he met with Mr Cunningham to inform him that Westelect staff, including the Operations Director, Mr Kingsley Morcombe, had become increasingly worried about Mr Cunningham’s erratic behaviour. During that conversation, Mr Bizzaca suggested that Mr Cunningham had an ice addition.

In 2018, Mr Bizzaca said he was approached by Mr Morcombe to buy out Mr Cunningham's shares in the business. The share sale did not eventuate and instead of receiving further information regarding the share sale, Mr Bizzaca received a redundancy letter on 3 May 2018.

The meeting at which Mr Bizzaca was advised of the termination of his employment lasted only 90 seconds.

The Tribunal's decision

Role no longer required to be performed by anyone

Deputy President Beaumont found that, despite the souring of the relationship between Mr Cunningham and Mr Bizzaca, the role was indeed no longer required to be performed by anyone because of Westelect's precarious financial position.

At its largest and most profitable, Westelect’s workforce consisted of 50 employees occupying full-time and casual positions. However, by November 2017 there were only nine employees with this number set to drop even further. The economic viability of Westelect appeared to be in question and there was a need to reduce corporate overheads expeditiously.

Westelect said that there were no longer sufficient work duties to occupy a full-time HR/OS Manager and that the functions of that role were easily absorbed by other staff, namely Mr Cunningham. Deputy President Beaumont accepted this evidence.

No options for redeployment

Given the financial position of the company, Deputy President Beaumont found it unsurprising that there were limited alternative positions available within the business.

Mr Bizzaca argued that he could have been redeployed into an electrician position as he was a qualified electrician. Mr Cunningham’s evidence was to the effect that Mr Bizzaca did not meet the client’s requirements having not worked on mobile plant.

Deputy President Beaumont found that the electrician role was not a suitable position because Westelect was a small employer facing a grave financial situation and, at a minimum, retraining was required for Mr Bizzaca to be placed in that position. In light of the company's grave financial circumstances, the electrician role was not a suitable redeployment opportunity.

No obligation to consult

Mr Bizzaca was informed of the redundancy of his role at a meeting where Mr Cunningham said "I think you know what's coming up". The meeting lasted only 90 seconds.

However, Deputy President Beaumont ultimately found that neither the Agreement nor any modern award applied to Mr Bizzaca's employment and therefore there was no obligation to consult.

Lessons for employers

While the water may be muddied with respect to the motivation of an employer to terminate an employee's role on the basis of redundancy, if the role is genuinely not required to be performed by anyone within the business (e.g. for financial reasons), the motivations of the employer will not prevent the redundancy being a genuine redundancy. However, unlawful motivations may give rise to other types of legal claims

Employers should be aware that, when considering whether it is a genuine redundancy, the onus will rest with them to prove that the job is no longer required to be performed by anyone.

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