s.394 - Unfair dismissal

Application for an unfair dismissal remedy - jurisdictional objection - genuine redundancy - application dismissed.

• [1] Mr Rojas was employed by Salon & Barber Supply Co. Pty Ltd in the position of General Manager & Sales Manager. He was dismissed on 3 June 2025. Salon contends that Mr Rojas's dismissal was a genuine redundancy within the meaning of s 389 of the Fair Work Act 2009 (Cth). Mr Rojas denies that contention and submits that his dismissal was harsh, unjust and unreasonable.

• [2] Mr Rojas gave evidence at the hearing on 13 October 2025, as did both directors of Salon, Mr Lincoln Thomas and Mr Perry Thomas.

• [3] Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of Mr Rojas's unfair dismissal application.

• [4] There is no dispute between the parties and I am satisfied on the evidence that:

(a) the application was made within the period required in s 394(2) of the Act; and

(b) Mr Rojas is a person protected from unfair dismissal.

• [5] The Small Business Fair Dismissal Code does not capture economic dismissals, including redundancy situations.[1] Accordingly, Mr Rojas's dismissal was not consistent with the Small Business Fair Dismissal Code.

• [6] As to the fourth initial matter which I am required to consider, there is a dispute between the parties regarding whether Mr Rojas's dismissal was a genuine redundancy. I will address this issue first.

• [7] Section 389 of the Act defines genuine redundancy as follows:

(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:

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

• [8] "Associated entity" has the meaning given by s 50AAA of the Corporations Act 2001 (Cth).

The employer no longer required the employee's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise (s 389(1)(a))

• [9] It is necessary to determine whether Salon no longer required the job of Mr Rojas to be performed by anyone because of changes in the operational requirements of Salon's enterprise.[2]

• [10] A job involves "a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee".[3] Where there has been a reorganisation or redistribution of duties, the question is whether the employee has "any duties left to discharge".[4] If there is no longer any function or duty to be performed by that person, their job becomes redundant.[5] For example, an employer may redistribute all the tasks done by a particular person between several other employees or outsource the tasks to a third party, resulting in the person's job no longer existing.

• [11] An employee's job may still be genuinely made redundant when there are aspects of the employee's duties still being performed by other employees.[6] The test is whether the job previously performed by the employee has survived the restructure or downsizing, not whether the duties have survived in some form.[7]

• [12] The reference to "changes in the operational requirements of the employer's enterprise" in s 389(1)(a) of the Act includes circumstances where an employer restructures its business to improve efficiency, productivity, sales, revenue or some other aspect of performance. The operational circumstances of a business which may give rise to a redundancy will reside in the direct knowledge of the employer. The evidentiary onus is on the employer to provide direct evidence about the nature of the employee's job and why it is no longer required to be performed as a result of changes in the operational requirements of the employer's enterprise. There is no requirement in s 389(1) of the Act that the employer act reasonably in deciding that, due to changes in its operational requirements, it no longer required the person's job to be performed by anyone.[8]

• [13] If a dismissal is found to be a genuine redundancy within the meaning of the Act, issues such as unfair selection procedures for redundancy are not relevant, because they go to the merits of the claim that the applicant was dismissed harshly, unjustly or unreasonably.[9]

• [14] Salon's business was marginally profitable in the financial quarters ending 30 September 2024 and 31 December 2024. However, in the financial quarter ending 31 March 2025, Salon made a loss before tax of $31,028, following a decrease in sales of about $300,000. The directors of Salon decided that they needed to take action to address the poor financial position of the business. They decided to cut spending on marketing and remove the position of General Manager & Sales Manager, being the job occupied by Mr Rojas, and distribute his duties and responsibilities to the remaining employees and contractor engaged by the business.

• [15] The changes in the operational requirements of Salon's business involved the need to reduce costs following a poor financial result in the March 2025 quarter.

• [16] For the reasons set out above, I am satisfied on the balance of probabilities that the real reason for Mr Rojas's dismissal was the redundancy of his position as General Manager & Sales Manager and that Salon no longer required Mr Rojas's position to be performed by anyone because of changes in the operational requirements of Salon's enterprise.

Compliance with any consultation obligation in a modern award or enterprise agreement that applied to the employment (s 389(1)(b))

• [17] For there to be a genuine redundancy within the meaning of s 389 of the Act, Salon must have complied with any obligation in a modern award or enterprise agreement to consult about the redundancy.

• [18] Mr Rojas contends that he was covered by the Clerks - Private Sector Award 2020 or the General Retail Industry Award 2020. Salon denies that Mr Rojas was covered by any award.

• [19] The 'principal purpose test' is relevant to whether an employee is covered by an industrial instrument such as the Clerks Award or the Retail Award. The test was summarised in Carpenter v Corona Manufacturing[10] as follows:

"In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not "employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials" and was not, therefore, covered by the Commercial Sales Award."

• [20] A Full Bench of the Commission explained various features of the 'principal purpose test' in Broadspectrum Limited v United Voice[11]:

"... the required analysis of the principal purpose is to be conducted by reference to the work performed by the employee. The test enunciated is primarily of utility where an employee performs a mixture of duties some of which fall, prima facie, within the coverage of the award or classification under consideration and some of which do not. However the test cannot be used to bring an employee within the coverage of an award or classification where the employee does not perform any of the prescribed work duties."

• [21] Clause 4.1 of the Clerks Award provides that it is an occupational award that covers "private sector employers throughout Australia in relation to employees wholly or principally engaged in clerical work". Clause 2 defines "clerical work" to include "recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard, attending a reception desk and administrative duties of a clerical nature". Schedule A to the Clerks Award sets out a classification structure for employees covered by the Clerks Award.

• [22] Clause 4.1 of the Retail Award provides that it covers employees (within a classification defined in Schedule A - Classification Definitions) of employers in the general retail industry throughout Australia. Clause 4.2 of the Retail Award defines the "general retail industry" to mean the "retail sale or hire of goods or services for personal, household or business consumption including..."

• [23] Salon operates a small wholesale online business selling barber products to professional barbers. Salon also sells some products direct to members of the public via its website. I prefer the evidence given by the directors of Salon that sales to members of the public accounted for, at the time of Mr Rojas's dismissal, about 20% of its sales, with the balance being wholesale sales. Mr Rojas contended that sales to consumers were about 40% of sales, but Mr Rojas did not have access to the financial accounts for the business. That is why I prefer the evidence given by the directors of Salon about this matter.

• [24] As General Manager & Sales Manager of Salon, Mr Rojas was responsible for the day-to-day management of Salon's business, including overseeing the three other employees in the business, supplier relationships and certain contract negotiations.[12] Mr Rojas's other responsibilities included:[13]

• Handling customer orders and enquiries (by phone, email, and online);
• Managing staff and overseeing daily operations;
• Maintaining and updating the e-commerce website (product uploads, pricing, stock control);
• Preparing and issuing invoices, purchase orders, and reports;
• Creating and implementing marketing and promotional campaigns; and
• Training staff, including an overseas customer service worker.

• [25] Mr Rojas accepted in his oral evidence that he was integral in finding and brokering the deal made by Salon with Supreme Trimmer for Salon to sell Supreme Trimmer's products in Australia. Mr Rojas found and brokered this deal as part of his role as General Manager & Sales Manager of Salon.

• [26] Mr Rojas contends that he was covered by the Clerks Award because the following work he performed aligns with the Clerks Award:

• Handling customer enquiries, e-commerce orders, and account management;
• Preparing reports, correspondence, and sales support functions;
• Training new staff in customer service; and
• Managing supplier accounts, including the Supreme Trimmer distribution agreement.

• [27] The principal purpose of Mr Rojas's role of General Manager & Sales Manager was to be responsible for the day-to-day management of Salon's business. Although some of Mr Rojas's duties and responsibilities involved clerical and administrative functions, the principal purpose of his role was to be the manager of the business. Mr Rojas was not wholly or principally engaged in clerical work. Accordingly, he was not covered by the Clerks Award.

• [28] I accept that, at the time of Mr Rojas's dismissal, Salon was "in the general retail industry throughout Australia" because about 20% of its sales were made through its website directly to customers for their personal or household consumption. However, Mr Rojas's job as General Manager & Sales Manager was more senior than the most senior classification (level 8) in Schedule A to the Retail Award. Mr Rojas reported directly to the directors/owners of the business; he did not report to any Salon employee. His overall responsibility for the day-to-day management of Salon's business, including finding and brokering the deal made by Salon with Supreme Trimmer for Salon to sell Supreme Trimmer's products in Australia, placed him in a position more senior than a Retail Employee Level 8, or any other position, under the Retail Award. This was reflected in the fact that Mr Rojas's base rate of pay in his job as General Manager & Sales Manager of Salon was about 48% higher than the base rate of pay for a Retail Employee Level 8 under the Retail Award. For these reasons, Mr Rojas was not covered by the Retail Award.

• [29] I am satisfied that Mr Rojas was not covered by a modern award or enterprise agreement at the time his position was made redundant. It follows that Salon did not have any obligation under a modern award or enterprise agreement to consult with Mr Rojas about his redundancy.

Was it reasonable in all the circumstances for the person to be redeployed within the employer's enterprise or the enterprise of an associated entity of the employer (s 389(2))

• [30] The "employer's enterprise" in s 389(2) is its "business, activity, project or undertaking". This provides the scope of the inquiry under s 389.[14]

• [31] "Redeployed" does not require there to be a vacant position.[15] Chief Justice Gageler, together with Justices Gordon and Beech-Jones, explained the position as follows in Helensburgh Coal:[16]

"The word "redeploy" does not, by its ordinary meaning, exclude or prohibit some change to how an employer uses its workforce to operate its enterprise that facilitates redeployment. Indeed, the ordinary meaning of "redeploy" - "to rearrange, reorganise, or transfer" - envisages some reorganisation or rearrangement. In other words, it does not mean that it would only have been reasonable to redeploy the person if there was a vacant position in the enterprise. This is reinforced by the fact that, unlike s 389(1), s 389(2) does not refer to a "job". The text of s 389(2) therefore does not, on its face, assume that a job is readily available. Rather, "redeployed" looks to whether there was work, or a demand for work, within the employer's enterprise or an associated entity's enterprise that could have been performed by the otherwise redundant employee."

• [32] The hypothetical inquiry under s 389(2) of the Act asks what, at the time of the dismissal, could have been done by the employer to redeploy the employee to perform other work within the employer's enterprise or the enterprise of an associated entity.[17]

• [33] As to reasonableness, the High Court in Helensburgh Coal observed that:[18]

"Reasonableness is an objective question to be determined by the FWC. The inquiry does not look to reasonableness only from the point of view of the employer, or only from the point of view of the employee (although they are relevant). It is an inquiry as to reasonableness in the context of the employer's enterprise, with regard to the nature of that enterprise."

• [34] The words "all the circumstances" are unmistakably broad. They can include:[19]

"... the attributes of the otherwise redundant employee, such as their skill set, experience, training and competencies. "[A]ll the circumstances" can also include those attributes of the employer's enterprise that concern its workforce, such as: its policies, including appetite for risk; plans; processes; procedures; business choices, such as a decision to terminate a contract in the future and a decision to persist with using contractors; decisions regarding the nature of its workforce, such as whether it has a blended workforce of both employees and contractors; contract terms, such as whether they are "as needs" contracts and whether the contractors are on daily work orders or on some long-term fixed commitment; practical concerns, such as whether redeployment would require the employee to undergo further training; and anticipated changes, such as another employee going on parental leave or retiring, a contract expiring, or a position being performed by a contractor while waiting for an employee to be hired. These are "circumstances" of how an employer uses its workforce to operate its enterprise, or why it does so in that manner, which can, depending on the circumstances of the case, bear on whether it would have been reasonable to redeploy an employee within the enterprise. These circumstances are not directed at the size, scope or nature of the enterprise, which are fixed at the date of dismissal."

• [35] The language of s 389 does not prohibit asking whether an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for a person who would otherwise have been redundant.[20]

• [36] I am satisfied on the evidence that Salon had one associated entity at the time of Mr Rojas's dismissal: Acumen Financial. The directors of Salon, Mr Lincoln Thomas and Mr Perry Thomas, are accountants. They run Acumen Financial, which is a tax agent and business advisory firm.

• [37] Mr Rojas contends it would have been reasonable for Salon to redeploy him into a customer service role with Salon or the position of Executive Assistant with Acumen Financial.

• [38] As to a customer service role, for about two years leading up to the end of the 2024 calendar year, Salon had employed two different customer service employees in its business. Mr Rojas trained each of those employees, but they did not work out. As a result, in about January 2025, Salon decided to outsource its customer service responsibilities to a contractor based overseas. The contractor was engaged through an agency in April 2025. Mr Rojas and Salon's Operations Manager trained the new contractor in the customer service responsibilities, which included documenting the relevant processes and procedures so that it would be easier to train a new contractor if the first contractor did not work out. The engagement of a person to undertake the customer service responsibilities was designed to free Mr Rojas up to do more General Manager & Sales work, because there was a perception on the part of the directors of Salon that customer service work was Mr Rojas's "comfort zone" to which he reverted in preference to focusing on General Manager & Sales work.

• [39] By the time that Salon decided to act in early June 2025 by making Mr Rojas's position redundant, the customer service contractor had been embedded into the business for close to two months. The engagement of an overseas based contractor to undertake the customer service responsibilities also saved Salon money, compared to what it was paying to a customer service employee based in Australia. Further, if Salon terminated its contract with the customer service contractor and instead gave that work to Mr Rojas, the directors of Salon believed that would have taken them back to the position they had been in for the previous two years, where Mr Rojas was doing customer service work or training an employee to do such work, which had not worked out well for Salon's business. I am satisfied that these were reasonable business decisions to justify the action taken by Salon to make Mr Rojas's job redundant and not redeploy him into a customer service role in the business.

• [40] As to the position of Executive Assistant with Acumen Financial, at the time Mr Rojas was made redundant, the website of Acumen Financial included a page which stated, "We currently have positions open for the following roles: ... Executive Assistant". Notwithstanding the fact that this page represented that the role of Executive Assistant was "open", I accept the evidence given by the directors of Salon that this was not the case. The "positions open" page on the website of Acumen Financial had remained the same since December 2022. If a person had expressed an interest in June 2025 in the role of Executive Assistant, I accept the evidence of Salon's directors that the person would have been told that the role was not currently available but the person could leave their contact details for Financial Acumen to contact them in the future should such a role become available. Further, I also accept Mr Perry Thomas's evidence that experience working in an accounting firm is a prerequisite for an Executive Assistant seeking employment with Acumen Financial. Mr Rojas accepts that he does not have any experience working in an accounting firm.

• [41] I am satisfied that there were no available positions in the enterprise of Salon or Acumen Financial at the time Mr Rojas's dismissal took place. That is a relevant consideration, but it is not the end of the inquiry. I am also satisfied on the evidence before the Commission that there were no reasonable steps that could have been taken by Salon to redeploy Mr Rojas to perform other work within Salon's enterprise or the enterprise of Acumen Financial. Both businesses are small. They engage limited numbers of employees and contractors. Salon needed to reduce costs. As a result, it decided to reduce spending on marketing and reduce its headcount by one employee, with the result that there would only be three employees and one contractor engaged in the business. Mr Rojas's job was identified as the one to be removed from Salon's business, with his duties and responsibilities assigned to the remaining employees and contractor. Given the comparatively lower cost of the contractor's remuneration and the fact that it had not worked well for the business when Mr Rojas was doing the customer service work (or training another employee in such work) and his General Manager & Sales work, I accept that it was not reasonable for Salon to redeploy Mr Rojas into a customer service role or simply terminate the contract of the customer service contractor and retain Mr Rojas in his job as General Manager & Sales Manager. Mr Rojas's lack of experience in an accounting firm meant that it was not reasonable in all the circumstances to redeploy him to undertake work in that firm.

• [42] For the reasons given, I am satisfied that it would not have been reasonable in all the circumstances for Mr Rojas to have been redeployed within Salon's enterprise or the enterprise of Acumen Financial.

• [43] For the reasons given, I am satisfied that Mr Rojas's dismissal was a case of genuine redundancy within the meaning of s 389 of the Act. It follows that Mr Rojas's unfair dismissal application must be dismissed.

Mr L. Thomas and Mr P. Thomas, directors, appearing on behalf of Salon.

[1] Groszek v Toyvision International Pty Ltd [2015] FWC 697 at [37]; Harrison v Queensland University of Technology [2010] FWA 8789 at [6]; Nalevansky v Thought Equity Motion Inc. [2010] FWA 3707; Iannello v Motor Solutions Australia Pty Ltd [2010] FWA 3125

[3] Jones v Department of Energy and Minerals [1995] IRCA 292; (1995) 60 IR 304 at 308 per Ryan J; applied in Ulan Coal Mines Limited v Howarth [2010] FWAFB 3488; (2010) 196 IR 32 (Ulan Coal 1) at [17]

[6] Dibb v Commissioner of Taxation [2004] FCAFC 126; (2004) 136 FCR 388 at 404-5

[7] Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 at [27] per Hamberger SDP

[8] Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29 at [31]

[9] Johnston v Blue Circle Southern Cement Pty Ltd (2010) 202 IR 121 at [48]

[10] [2002] AIRC 1562; (2002) 122 IR 387 at [9]

[11] [2017] FWCFB 3202 at [31]

[12] Hearing Book at pp 38[3] & 193[3]

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