Non Genuine Redundancy used to disguise management dissatisfaction
The FWC has determined that the termination of a senior manager due to reasons of redundancy was not genuine, but rather linked to dissatisfaction with his performance which the business failed to adequately address with him.
The manager commenced employment with Knight Watch Security Pty Ltd T/A Bluestar Security Services (Bluestar) on 6 August 2018 until his termination on 17 December 2019. The position he accepted was State Manager NSW; however, he actually was primarily responsible for business development within the State.
At a meeting with the Company Director on 17 December 2019, the manager was told he was being made redundant with immediate effect, and that he would be provided with pay in lieu of notice as well as redundancy pay. However, the following day, the company offered the position of General Manager NSW to another person who was then appointed to the role.
At the hearing, Bluestar claimed that the new role differed in various respects from the redundant role, focusing more on operations management rather than business development. Nevertheless, the redundant manager claimed that Bluestar failed to consult him about the redundancy, and further, that it would have been reasonable in all the circumstances to redeploy him to the newly created position.
As noted by DP Dean, the evidence clearly indicated the Company Director’s dissatisfaction with the manager’s performance “soon after Mr Paramore commenced the position, he formed the view that he was a poor fit for the role. Mr Davernmaris said that the Applicant failed to meet the KPIs for budget sales growth and failed to bring in new opportunities for the business…I considered terminating the Applicant’s employment soon after his appointment.” A restructure occurred resulting in the manager and an equivalent position in Victoria being abolished.
However, DP Dean determined that the reason for the restructure, and hence the redundancy, was dissatisfaction with the manager’s performance and therefore the redundancy was not a genuine redundancy within the meaning of s.389 of the Fair work Act.
The Commission accepted both of the manager’s arguments that Bluestar had failed to consult with him about the redundancy, and also that having the skills and experience to perform the newly created role, he should have been considered for redeployment to the position.
Although performance issues had been raised, DP Dean stated “I am not satisfied that the Applicant was told in clear and explicit terms that his employment was in jeopardy if he did not rectify the concerns held by Mr Davernmaris. He was advised at the time of his dismissal that he was dismissed because his position was being made redundant. Accordingly, I find that the Applicant was not given an opportunity to respond and accordingly was not afforded the procedural fairness required by the Act.”
The termination was ruled unfair. Determining that reinstatement was inappropriate, the former manager was awarded a payment of approximately $18,000 for the termination.
Brendan Paramore v Knight Watch Security Pty Ltd T/A Bluestar Security Services  FWC 4423 21 August 2020
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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.