Building Manager ruled to have been legitimately made redundant

Building Manager ruled to have been legitimately made redundant

The Fair Work Commission has rejected a building manager’s claim that he had been unfairly dismissed, accepting the position of his employer that he had validly been made redundant due to the impact of the pandemic on the building industry. However, he received a small amount of compensation consistent with the consultation requirements under the prevailing industrial instrument.

The manager had been employed by Mimosa Homes Pty Ltd (Mimosa) for just over six months as the Service and Warranty Manager, supervising the work of a small team that performed warranty assessment and repairs on occupied homes. Although he did not undertake on-site work, his employment conditions were covered by the Building and Construction General On-site Award 2020 (the Modern Award).

During his employment, the business suffered a considerable decline in revenue due to the COVID-19 pandemic. The manager, along with other staff, had been required to take periods of both paid and unpaid leave as interruptions in the building industry occurred.

On 7 October 2021, the manager was called to a meeting with Mimosa’s Building Manager and HR Manager and advised that his role was being made redundant and that there were no other roles to which he could be redeployed. At the same time, in addition to his redundancy, two other roles also engaged in the delivery of warranty services were made redundant.

In evidence before Commissioner Leyla Yilmaz, it was made clear that there were no concerns with his conduct or performance and that the manager was regarded as a valued member of staff. Mimosa’s decision was predicated on a belief that releasing him would allow him to seek paid alternative work elsewhere, as opposed to standing him down indefinitely without pay.

The manager claimed that his redundancy was not genuine and it was unfair because he was not consulted, was not given notice, and Mimosa failed to provide him with evidence of the downturn in the industry and government enforced closures of the building industry.

Commissioner Yilmaz accepted that there were genuine operational reasons for the decision to make his position redundant and that no other alternative positions were available.

However, she noted that under the terms of the Modern Award, employees who may be affected by a definite decision that is likely to have significant impacts must be consulted prior to the implementation of the decision, and the information is to be provided in writing.

Mimosa failed to do this.

Nevertheless, as she noted,

“I am satisfied that the process of termination of Mr (C’s) employment was deficient as it failed to comply with the technical Award requirements in a redundancy process. However, the outcome being a dismissal was unlikely to be different given the circumstances of the industry restrictions on working in occupied homes to which Mr (C’s) work was intrinsically linked”.

Although rejecting the unfair dismissal claim, the Commissioner awarded the manager a nominal sum of one week’s pay to reflect the consultation period for which he should have remained employed consistent with the Modern Award provisions.

DC v Mimosa Homes Pty Ltd [2022] FWC 618 (24 March 2022)

For queries about redundancy, the pandemic, award provisions, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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