Legal

Redundancy or unfair dismissal? FWA cuts compensation paid to employee to two weeks

Engel Schmidl /

Fair Work Australia has approved a redundancy made by transport hardware company UES International despite the company’s failure to comply with its obligation to consult with the employee it got rid of.

FWA initially found Leevan Harvey was unfairly dismissed rather than made redundant because, although UES International had been experiencing a downturn in business, the redundancy was not “genuine” because of the selection process used.

UES selected Harvey from a group of three staff members because his performance was “slow” and “less efficient” compared with the others. However, UES failed to consult Harvey about the change.

FWA found that, if not for the dismissal, the man would have been employed for “at least a year” and compensation of close to $7,200 was calculated based on this projection and other factors, including that a redundancy of $5,461 had already been paid.

However, when UES appealed the decision, the full bench of FWA found significant errors had been made in the application of the law in the initial determination.

The full bench found that the selection process used by UES was irrelevant because the dismissal was not performance-related, but rather UES “no longer required (Harvey’s) job to be performed by anyone because of changes in the operational requirements of its enterprise…”

The majority of the full bench agreed that while there was a valid reason for dismissal, the failure of UES to consult with Harvey “as required by the modern award applying to his employment” was sufficient to deem it harsh, unjust or unreasonable.

The majority determined that Harvey would probably have only been employed for another two weeks had UES met its obligations under the award and consulted with him before his dismissal.

As a result, it reduced Harvey’s compensation accordingly.

Had UES fulfilled its obligations, the redundancy would have been considered “genuine” and no compensation would have been awarded.

Advertisement

FROM AROUND THE WEB