Employee receives compensation following ruling that termination was not a genuine redundancy
The Fair Work Commission has ordered compensation for a former female employee after determining that her termination was not the result of genuine redundancy, as mandated by the relevant award and her contract of employment.
‘Ms T’ commenced employment on 31 January 2022 as a Model Manager with BMM Productions Pty Ltd (BMM). At the time of her dismissal, she was working part-time four days per week as a Senior Model Agent – Curve.
On 23 July 2023, she was called to a meeting, without prior notice, with BMM’s Chief Executive Officer and the Director of Operations. At that meeting, she was advised that the business had been struggling, that the CEO had injected personal funds into the business to keep it afloat, and that her position was being made redundant. Two other junior agents were also made redundant.
BMM provided her with a written notice of termination, including payment in lieu of notice and an amount for redundancy, which was said to be in accordance with the National Employment Standards and the Clerks – Private Sector Award 2020 (Clerks Award).
In evidence before Deputy President Tony Slevin, BMM’s CEO described that the business had been experiencing significant financial strain since 2020, compounded by the onset of COVID-19 and associated lockdowns, and a growth in artificial intelligence that reduced the number of models required of the agency.
While the Deputy President accepted that the business had financial problems, he accepted submissions from Ms T that BMM had failed to follow the requirements of the Clerks Award when considering reducing staff numbers. He further accepted that she was covered by the award and should be classified under Level 5.
As the Deputy President noted, “The obligation to consult on workplace change is a longstanding and important one, and it is an important workplace right that ensures fairness to employees during periods of change”. There was no contention that consultation had not occurred prior to Ms T’s termination.
The consequence of failing to comply with the award obligations meant that the dismissal of Ms T was not a genuine redundancy within the meaning of s 389 of the Fair Work Act 2009.
The Deputy President identified two relevant matter issues in determining Ms T had been unfairly dismissed.
Firstly, he noted that BMM had policies that drew its attention to the need to comply with Award obligations concerning redundancy, and consequently, their “failure to observe award obligations is a serious matter”.
Secondly, BMM’s decision to dismiss her “was made without giving Ms (T) information about the restructure and the opportunity to discuss whether she could play a role under the new arrangements. Ms (T) should have been given that opportunity … I find that the failure to consult had a significant impact on Ms (T) as it denied her a real opportunity to keep her employment”.
The Deputy President noted that Ms T had not sought reinstatement.
Based upon well-established Commission principles, he determined that a payment of $11,500 was sufficient compensation in the circumstances.
LT v BMM Productions Pty Ltd (U2023/7436) 22 November 2023
For queries about workplace consultation, redundancy, 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.
Ref: 473.1124
