Unfair dismissal and Covid19 pandemic

In what is the first unfair dismissal case I have come across in the Fair Work Commission where the dismissal was found to have been motivated by the economic implications to the employer’s business of the Covid 19 pandemic, Commission Williams has upheld the availability of the genuine redundancy jurisdictional defence.

Here is an extract from the decision. Interestingly the dismissal was on 13 February 2020.

“Consideration

[61] Section 385 of the Act, set out below, defines what is an unfair dismissal.

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[62] To be an unfair dismissal, amongst other things, the dismissal must not be a case of genuine redundancy.

[63] Section 389 of the Act, set out below, then defines what a genuine redundancy is.

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[64] Ms Takezawa’s view in February 2020 of the likely impact of the Covid-19 pandemic on the business was prescient. It is now known that the negative impact of the Covid-19 pandemic on the Respondent’s income has continued after the Respondent dismissed Ms Wilson. The fact that Ms Takezawa correctly predicted this at an early stage is to her credit.

[65] There is no requirement for a business to wait until a possible financial crisis has actually manifested itself before it takes action to protect its’ business interests.

[66] Ms Takezawa’s assessment was that the cancellations of bookings in February 2020 were a portent. The business was already in a poor financial state as the result of unexpected debts having been identified in January 2020, so she decided to make changes to reduce costs to protect the business.

[67] Consequently, in February 2020 Ms Takezawa decided that the business did not need Ms Wilson’s particular job to be performed by anyone. Certainly some duties that made up part of that job still needed to be done and these were undertaken by others.

[68] The fact some of Ms Wilson’s duties still needed to be done after she was dismissed does not mean her job was not redundant. An employee’s job may still be redundant even where there are some of the employee’s duties still being performed by other employees. 3

[69] I am satisfied that because of changes in the operational requirements of the Respondent’s business Ms Wilson’s job was no longer required to be performed by anyone.

[70] Ms Wilson submitted that the Clerks Private Sector Award 2010 (the Clerks Award) 4 applied to her employment.

[71] The coverage clause of the Clerks Award is set out below.

“4. Coverage

4.1 This award covers employers in the private sector throughout Australia with respect to their employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature, and to those employees.”

[72] Considering the evidence provided by Ms Wilsons I do not accept that she was engaged wholly or principally on clerical work or administrative duties of a clerical nature. The evidence is that the breadth and complexity of her responsibilities went well beyond this.

[73] I find that the Clerks Award did not apply to the employment of Ms Wilson.

[74] There is no suggestion that any other modern award or enterprise agreement applied to Ms Wilson’s employment.

[75] Noting the Respondent was a very small business there is no evidence that it would have been reasonable in all the circumstances for Ms Wilson to have been redeployed to some other position.

[76] Considering all the material before the Commission I am satisfied that the dismissal of Ms Wilson was a case of genuine redundancy. Consequently, the dismissal cannot have been unfair.

[77] This application will be dismissed and an order [PR719612] to that effect will now be issued.”

Wilson v Monizumi Pty Ltd ATF The Takezawa Trust T/A Shoji Australia (2020)FWC 2713 delivered 20 May 2020 per Williams C