One Minute Summary
- Following the completion of a project the employee faced redundancy. However, the employer had some capacity to keep him employed on alternative work. When the employee expressed dissatisfaction with the pay rate he was terminated.
- During FWC proceedings the Deputy President examined transcript from the redundancy termination meeting. It became apparent that while there was a redundancy there were also performance/conduct issues that were involved in the termination decision.
- This meant that the genuine redundancy was no longer genuine and became an unfair dismissal.
- As the employer could not provide a defence to the unfair dismissal proceedings the termination became unfair. The employee was reinstated and paid 6 months pack pay at $60ph – less any interim earnings.
Mr Moubarak was employed as a permanent commercial diver in January 2023 after having previously been employed as a casual with the same employer. A commercial diver undertakes services often associated with civil construction and maintenance of marine facilities. It is regarded as a dangerous occupation with high safety standards.
Mr Moubarak was verbally terminated on 3 December and worked out his notice finishing on 17 December 2025. Thereafter he lodged an unfair dismissal application with the Fair Work Commission.
During proceedings the Mr McLennan, the Managing Director for McLennan’s Diving Service, gave evidence that:
- ‘The Applicant’s employment was terminated due to a lack of available work, arising from the Respondent’s operational requirements.’
- ‘The decision was based on the Respondent’s operational requirements following the completion of projects and the absence of sufficient new work.
- ‘The sole reason for the termination of Mr Moubarak’s employment was the lack of available work. The termination was not related to any allegation of misconduct or performance.’
The termination letter, dated 3 December 2025, was presented as evidence which included the above points. Additionally is specifically stated that the position was made redundant due to the completion of the Malabar Bypass Project, however the letter makes no reference to the termination being a redundancy.
During arbitration proceedings Mr Moubarak stated he did not receive a termination letter at the time of the dismissal. Evidence was provided that the termination letter was produced several months after the termination took place. The Deputy President accepted that the non-provision of a termination letter was due to a miscommunication between the Managing Director and his administrative assistant believing she had given Mr Moubarak a termination letter.
During proceedings the transcript from the 3 December 2025 meeting was provided -presumably from an AI meeting assistant. The Deputy President closely examined the transcript and highlighted the following section:
[Mr McLennan]: I’m going to put it very clearly. Yeah. The […] last jobs we’ve been doing where we needed lots of bodies have finished for the time being, we’re going to be doing more. I’m interested in keeping you. Okay, but I’m not interested in keeping you if you’re not aligned with our goals on a daily basis, that is making our equipment ready, being ready, being cooperative, wanting to be here. If you don’t have those goals, there’s no point you being here. Okay, so do you want to be here?
Mr Moubarak responded that he wanted to continue working. Mr McLeannan then outlined tasks he would be doing in the workshop and that he would be paid $60ph. When Mr Moubarak stated he would not be happy with $60ph, Mr McLennan responded by giving Mr Moubarak two weeks’ notice of termination.
Examining the minutes Deputy President Bryce stated:
‘Contrary to Mr McLennan’s evidence, the minutes of the December Meeting show that the Applicant was not dismissed ‘solely’ because of a lack of work. Rather, the Applicant was dismissed because of a lack of available work, and because of his allegedly poor attitude (in circumstances where the evidence as to such poor attitude is not properly before the Commission). In short, the Respondent’s position is not that it could not afford to keep the Applicant employed, but that it could not afford to keep the Applicant employed if his attitude and behaviours remained the same.
‘I do not consider that the reasons for the Applicant’s dismissal in this matter are sound, defensible, or well founded. I therefore find that there was not a valid reason for the Applicant’s dismissal.
The termination was therefore not a genuine redundancy under the Fair Work Act. The question of lack of consultation (which is required for a redundancy termination) was not addressed in the decision.
The redundancy termination was therefore treated as an unfair dismissal and examined against the requirements of the Fair Work Act.
The Deputy President examined the evidence and stated that: ‘… the Applicant was not aware of the precise nature of the Respondent’s concerns about his attitude or conduct leading up to his dismissal. …. that weighs in favour of a finding that the Applicant’s dismissal was harsh, unjust, or unreasonable.’
The lack of procedural fairness required in a termination was also discussed.
The Deputy President noted that the employer was a small business – employing between two and six people depending on the level of available work. The DP then added that ‘The absence of a dedicated human resource management specialist does not relieve an employer of extending an appropriate degree of courtesy to its employees even when implementing something as difficult and unpleasant as the termination of a person’s employment.’
In finding Mr Moubarak termination unfair the Deputy President stated; ‘I have found no valid reason for the Applicant’s dismissal (s.387(a)), and an absence of procedural fairness in effecting his dismissal (s.387(h)). These two criteria, along with the criteria under s.387(b) and (c) of the Act, weigh in favour of a finding that the Applicant’s dismissal was harsh, unjust, and unreasonable.’
In his application the applicant had sought reinstatement to his former position. Mr McLennan stated he would accept reinstatement as he held no animosity towards Mr Moubarak.
The Deputy President agreed with the two parties and ordered reinstatement to take place. This included continuity of employment and the payment of the intervening period between the date of dismissal and the date of reinstatement. A quick back of the envelope calculation would put this at approximately 6 months wages – close to $60,000 less any income Mr Moubarak had earned between those two dates.
Commentary
Let start with the obvious – a redundancy termination should not include any reference to performance or conduct issues. The above case and others before it make it clear that including performance or conduct issues makes it a non-genuine redundancy dismissal.
This becomes complicated where a genuine redundancy happens to coincide with an existing counselling or disciplinary process. I would strongly recommend employers seek professional advice where this happens to occur.
Similarly, genuine redundancies can occur while an employee is absent on parental leave. In addition to unfair dismissal, this can also open General Protections and Discrimination claims against the employer. They have no upper compensation limits.
Employers are also reminded of the consultation requirements during a redundancy process. Lack of consultation can turn a genuine redundancy into an unfair dismissal.
Reading the above case it also showed how easy a conversation can go off the rails. In response to the employee stating they would not be happy with $60ph the Managing Director lost his cool and terminated him in response. A costly decision.
Being aware of where you legal boundaries lie is crucial. Employee relations and employment law is getting more complicated – not only from the clauses in the Fair Work Act you need to follow but also in how the Fair Work Commission and Federal Court applies the law. No, AI is not a good resource to assist with this.
Kind Regards
Michael Schmidt
M 0438 129 728
www.hunteremployeerelations.com.au
Guiding senior managers through complex employee relations issues
Sign up here to receive Hunter Employee Relations Update directly to your email inbox
Want to know more about our client services?
Want to know more about Hunter Employee Relations?
|
|
|
|
|