s.394 - Unfair dismissal

Orange Vocational Educational and Training Pty Ltd

Application for an unfair dismissal remedy - jurisdictional objection of 'genuine redundancy'- objection not upheld - application dismissed.

[1] Mrs Catherine Harrold applied under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy. The respondent to Mrs Harrold's unfair dismissal application is Orange Vocational Education and Training Pty Ltd (the Respondent). On 9 July 2025, Mrs Harrold was notified of her dismissal with immediate effect. As she lodged her unfair dismissal application with the Commission on 22 July 2025, I am satisfied the application was made within the period required in subsection 394(2) of the Act (s.396(b)). I am also satisfied Mrs Harrold was a person protected from unfair dismissal (s.396(b)) because she had completed the minimum employment period, she was covered by the Educational Services (Post-Secondary Education) Award 2020 (Award) and the sum of her annual rate of earnings was less than the applicable high-income threshold of $183,100. Further, while there was no dispute that the Respondent was a small business employer, the Respondent did not contend that the dismissal was consistent with the Small Business Fair Dismissal Code (Code). As such, I am not required to determine this question (s.396(c)). The Respondent did, however, object to Mrs Harrold's application on the basis that her dismissal was a case of genuine redundancy (s.396(d)) and I am required to decide this matter before considering the merits of her application.

[2] The Respondent's contention that Mrs Harrold's dismissal was a case of genuine redundancy (s.396(d)) requires engaging with s.389 of the Act, which provides:

"(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."

[3] By way of background, the Respondent is a registered training organisation, delivering certificate level tuition on Microsoft Teams via a team of trainers/assessors. Mrs Harrold was engaged as a trainer/assessor and also performed some administrative tasks. The Respondent's Chief Executive Officer, Mr Matthew Dowd, gave evidence regarding a downturn in the Respondent's business that was not challenged by Mrs Harrold. He stated that in October 2023, the Respondent had approximately 25 employees and enjoyed annual revenue of $4.5 million, 70% of which was derived from one client. The proportion of total revenue from that client rose to 85% before the client decided, in early 2024, to cease using the Respondent for its training needs. The consequence of this was that from May 2024, the client ceased enrolling its employees in the Respondent's courses. This forced the Respondent to reduce its staff numbers, initially from 25 to 13 and then down to 7. Further, when the May 2024 intake finished their training approximately 12 months later in May 2025, the Respondent's staffing needs reduced further. At this point, the Respondent's revenue was tracking at $500,000.00 per annum and it was attempting to reposition itself as a smaller organisation pursuing new revenue sources. Ultimately, the Respondent was not able to generate sufficient revenue to cover its operating costs going forward and made the decision to reduce its staff numbers further, from 7 employees to 3.

[4] Mr Dowd said he arranged a meeting with Mrs Harrold for 9 July 2025 at which he proceeded to inform her about the state of the business, the decline in revenue and his decision to reduce staff numbers from 7 employees to 3, before advising her that her role was no longer required. Mr Dowd said he also told Mrs Harrold that there were no redeployment options. Mrs Harrold broadly agreed with this account and said that when Mr Dowd told her she would be paid 5 weeks in lieu of notice, her response was to ask whether she could work her notice period so she could finish some projects she had been working on. Mrs Harrold said that in response, Mr Dowd told her that another employee would take over her role. Mr Dowd and Mrs Harrold agreed that there was ensuing dialogue about whether Mrs Harrold would relocate to Western Australia, where he has a shareholding in another business providing in-person training services. This did not amount to anything because there were no roles available there.

[5] Based on the accounts of Mr Dowd and Mrs Harrold, I am satisfied the Respondent no longer required Mrs Harrold's job to be performed by anyone because of the operational requirements of its enterprise (s.389(1(a)). I have also considered whether it would have been reasonable in all the circumstances for Mrs Harrold to have been redeployed in the business of the Respondent, or the business of an associated entity of the Respondent (s.389(2)). I am not persuaded in all the circumstances that redeployment would have been reasonable because I am not satisfied the trading circumstances of the Respondent could have supported redeployment or that there were any roles for her to go to in the Western Australian business.

[6] Turning to s.389(1)(b), I observe that the Award covered Mrs Harrold and that clause 29 of the Award imposed an obligation on the Respondent to consult about the redundancy. In particular, clause 29.1 of the Award required that if the Respondent had made a definite decision to make major changes in organisation or structure that were likely to have significant effects on Mrs Harrold, such as the termination of her employment, it was required to give her notice of the changes, discuss them with her and commence such discussions as soon as practicable after a definite decision had been made. Further, clause 29.2 required the Respondent to give Mrs Harrold, for the purposes of the discussion, all relevant information about the changes in writing, including their nature, their expected effect on her and any other matters likely to affect her. In this case, the Respondent did not comply with this obligation imposed by clause 29.2 of the Award. Mr Dowd did not give Mrs Harrold the required information in writing for the purposes of the discussion they had on 9 July 2025. This being the case, Mrs Harrold's dismissal was not a case of "genuine redundancy" as defined by s.389 of the Act.

[7] The consequence of this finding is that s.385 of the Act comes into focus and I must proceed to consider the merits of Mrs Harrold's application. Section 385 provides:

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

(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."

[8] On the basis of the material and evidence before me, it is clear Mrs Harrold was dismissed (s.385(a)) and that this is not a matter that involves consideration of whether the dismissal of Mrs Harrold was consistent with the Code (s.385(c)). As I am satisfied Mrs Harrold's dismissal was not a case of "genuine redundancy" as defined by s.389 of the Act (s.385(d)), this leaves only s.385(b) to consider. In determining whether Mrs Harrold's dismissal was harsh, unjust or unreasonable, and therefore unfair, I am required to give consideration to s.387 of the Act.

[9] In this case, the reason for the dismissal given by the Respondent was redundancy. In this regard, no relevant finding can be made in relation to whether the purported redundancy constituted a "valid reason for the dismissal related to the person's capacity or conduct..." (s.387(a)) and for its part, the Respondent did not assert that there was any valid reason for dismissal related to Mrs Harrold's capacity or conduct. The Respondent's reliance on redundancy as the reason for dismissal requires consideration in connection with s.387(h), "any other matters the Commission considers relevant." This is dealt with below.

[10] While s.387(b) and s.387(c) refer to reasons related to the capacity or conduct of the employee, the Respondent did not notify Mrs Harrold that there was any reason for her dismissal related to her capacity or conduct, valid or otherwise, and nor did it assert that there was a valid reason for dismissal related to her capacity or conduct. The considerations in s.387(b) and s.387(c) are therefore neutral considerations in this matter.

[11] As to s.387(d), the evidence before me indicates that there was no unreasonable refusal by the Respondent to allow Mrs Harrold a support person at the discussion relating to her termination on 9 July 2025. Section 387(d) will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them. In terms of s.387(e), the Respondent did not rely on issues of unsatisfactory performance, such that consideration of this particular factor is not required. The s.387(d) and s.387(e) factors do not, therefore, weigh in favour of a finding of unfairness.

[12] I consider, however, that the s.387(f) and s.387(g) factors offer some explanation for quality of the process implemented by Mr Dowd. At the time of the dismissal, the Respondent had 7 employees. It did not have dedicated internal human resource management specialists or expertise. I consider these factors had a direct impact on the procedure Mr Dowd adopted because although he thought he had undertaken the correct procedure, he had not complied with the obligations under the Award.

• [13] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant. In this respect, I have noted Mrs Harrold's period of service. I also observe that concluding that a dismissal was not a case of "genuine redundancy" within the meaning of s.389 of the Act does not necessarily lead to a conclusion that the dismissal was unfair. Even if the dismissal was not a "genuine redundancy" for the purposes of s.389, it does not follow that the dismissal was not a bona fide redundancy for a legitimate reason. As outlined above, I am satisfied that the Respondent no longer required Mrs Harrold's job to be performed by anyone because of changes in its operational requirements and I have not been persuaded that it would have been reasonable in all the circumstances for Mrs Harrold to be redeployed either within the Respondent's enterprise or the enterprise of what appeared to be an associated entity in Western Australia. In this case, the Respondent's contention that the dismissal of Mrs Harrold was a case of "genuine redundancy" failed on the basis I was not satisfied that the Respondent had complied with the obligation in the Award to consult about the redundancy. The evidence established that Respondent did not consult or otherwise notify Mrs Harrold in relation to the redundancy until it notified her of her dismissal. This represents a deficiency in the procedure adopted by the Respondent. It is, however, relevant to consider what might have been the result of consultation.[1] In this case, I do not consider that consultation would have changed the decision to dismiss Mrs Harrold on the basis of redundancy. Further, even if the parties had discussed possible measures to avert the redundancy, I am not persuaded that these would have resulted in the operational reasons for the dismissal in this case being overcome or led to a different outcome. The contraction of the Respondent's operations and the scale of its financial haemorrhaging were such that the die was cast. On balance, I do not consider the failure to consult rendered Mrs Harrold's dismissal unfair.

[14] During the conduct of her application, Mrs Harrold intimated that she considers her dismissal to have been harsh because its timing was such that she has been deprived of an entitlement to a pro rata long service leave payment. Mrs Harrold had commenced employment with the Respondent on 1 November 2023 and among the agreed arrangements upon this taking effect was the recognition of her prior service with her previous employer, which transferred to the Respondent. Therefore, having commenced employment with her previous employer on 10 July 2018 and been terminated by the Respondent with immediate effect on 9 July 2025, Mrs Harrold contends she attained 7 years of service, thereby securing an entitlement to pro rata long service leave upon termination under Tasmanian legislation. I am not convinced. I consider that s.37A of the Acts Interpretation Act 1901 (Cth) provides useful guidance:

"For the purposes of any Act, the time at which a person attains a particular age expressed in years is the commencement of the relevant anniversary of the date of the birth of that person."

[15] As such, I consider that Mrs Harrold needed to have been employed as at 10 July 2025 to have completed the 7 years of service necessary to qualify for the pro rata long service entitlement provided for in s.8(2)(b) of the Long Service Leave Act 1976 (Tas).

[16] There was also some debate as to whether the Respondent should have allowed Mrs Harrold to serve out her 5-week notice period. Mrs Harrold says two other employees who were made redundant at the same time as her were permitted to do so but she was not. She claims that she had work she could have completed and handed over. Mr Dowd maintained that the rationale for the different arrangements was underpinned by the nature of the work each individual was performing at that point in time. He said the employees who worked during their notice period were doing "day-to-day", operational work, whereas Mrs Harrold had been working on tasks which were "work for the future." I have also noted the email Mr Dowd sent Mrs Harrold on 14 July 2025 in response to her raising the long service leave issue. The tenor of Mr Dowd's email and his evidence as to the different notice arrangements he applied to the redundant employees persuades me that Mr Dowd had not confected the 9 July 2025 termination date in order to avoid paying Mrs Harrold pro rata long service leave.

[17] Even if I am wrong in relation to the absence of consultation, the long service leave entitlement and the timing of Mrs Harrold's termination date, and it was considered that these factors of themselves, or in combination, rendered her dismissal unfair, I would not have ordered reinstatement. Given the state of the Respondent's business, I would not have considered reinstatement was appropriate in the circumstances.

[18] Nor, for a number of reasons, would I have ordered the payment of compensation. Firstly, while Mr Dowd paid Mrs Harrold 11 weeks' redundancy pay as per the entitlement in s.119 of the Act, he did so when Mrs Harrold had no entitlement to redundancy pay due to the Respondent's status as a 'small business employer' and the operation of s.121(1)(b) of the Act. Secondly, I do not consider a consultation period of any more than one or two further days would have been required given the size of the Respondent's operations at the time of the dismissal. Having noted that the $18,403.83 redundancy payment the Respondent erroneously made exceeds the $10,150.38 long service leave claim of Mrs Harrold by over $8,000.00, and that the value of an extra few days for consultation purposes would be well and truly absorbed by this, I would not have considered an order for compensation to be appropriate in all the circumstances of this case.

[19] For the reasons outlined above, I am not satisfied that Mrs Harrold's dismissal was a case of "genuine redundancy" for the purposes of s.389 of the Act. I have also considered whether Mrs Harrold's dismissal was harsh, unjust or unreasonable (s.385(b)) and having considered each of the matters specified in s.387 of the Act, I am not satisfied the dismissal of Mrs Harrold was harsh, unjust or unreasonable. However, even if I had concluded Mrs Harrold's dismissal was unfair, I would not have ordered reinstatement and nor would I have considered an order for compensation to be appropriate in all the circumstances of this case.

[20] Mrs Harrold's application for unfair dismissal remedy is dismissed. Given this conclusion, I will not issue an Order.

Mr M Dowd for Orange Vocational Education and Training Pty Ltd

[1] Maswan v Escada Textilvertrieb T/A ESCADA [2011] FWA 4239 at [37].

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