This extract from an unfair dismissal decision contains observations about one manner of calculating compensation for unfair dismissal where the employer’s defence of genuine redundancy fails due to a lack of consultation.
“Remedy
[33] Each Applicant was a person protected from unfair dismissal at the time they were dismissed. Given my conclusions in relation to s.385 and s.387, I am satisfied that the Applicants were unfairly dismissed. It is open to me to make an order granting a reinstatement6 or compensation7 remedy. The Applicants did not seek reinstatement. They were terminated for reasons of ‘redundancy’ because the company had ceased to trade. The company is not presently trading. Court proceedings involving the management and future of the Respondent are ongoing. I do not regard reinstatement as appropriate in the circumstances.
[34] The Commission can only make an order for compensation where it is considered appropriate in all the circumstances to make such an order.8 Having concluded that the dismissals were harsh, I consider it to be appropriate to make an order for compensation. The amount, if any, of such order is determined by applying the relevant statutory provisions and accepted principles derived from the authorities.
[35] Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation, including the criteria set out in s.392(2).
Remuneration that would have been received or would have been likely to receive (s.392(2)(c))
[36] In UES the majority concluded that in circumstances where there had been a failure to consult in accordance with the applicable industrial instrument, an amount of two weeks remuneration was the amount that an employee would have received if the employee had not been dismissed. The majority reasoned that this was the period the employer would have taken to comply with its obligation to consult about the redundancy.9 That case involved the redundancy of one employee who worked in a particular part of a business. The business continued to operate after the redundancy was implemented. The circumstances here are different. The business ceased to operate on the 18 August 2023 and the entire workforce was made redundant. There was no detailed explanation as to why the 18 August was the date chosen to close the Respondent’s operations other than Mr. Chen deciding that it was no longer feasible to continue to trade. There was some evidence that even though a consent order was made in the Supreme Court proceeding on 23 August, this did not ultimately have the effect of freeing up the Respondent’s funds such that the Applicants’ employment could have continued. I conclude that the company was unable to continue to trade beyond 18 August and that the Applicants would therefore not have received or been likely to receive any remuneration beyond the date of their dismissal.”
Hongnipon and Others v Total Fire Stopping Pty Ltd (2023) FWC 3412 20 December 2023 per Roberts DP