s.394 - Application for unfair dismissal remedy

Birds Basement Pty Ltd ATF The Trustee For Dadon No. 37 Family Trust

Application for an unfair dismissal remedy; objections as to genuine redundancy and Small Business Fair Dismissal Code dismissed; failure to consult over dismissal; dismissal unfair; compensation ordered.

• [1] On 24 July 2025, Mr Deependra Raj Hamal made an application pursuant to s 394 of the Fair Work Act 2009 (the Act) against his former employer, Birds Basement Pty Ltd as trustee for The Dadon No 37 Family Trust (Birds Basement). Mr Hamal's employment with Birds Basement was terminated on 24 July 2025 after two years and nine months. Mr Hamal was engaged at Birds Basement as its head chef. In July 2025, Birds Basement made a decision to abolish the position of head chef from its organisational structure and says the position is redundant.
• [2] Birds Basement objected to the application on the basis it says Mr Hamal's dismissal was as a result of a genuine redundancy and was consistent with the Small Business Fair Dismissal Code (the Code). Mr Hamal contests these objections and seeks from the Commission a remedy in respect to unfair dismissal.
• [3] I conducted a hearing to determine those objections on 26 November 2025. For reasons delivered on transcript, the objections were dismissed. The objection that the dismissal was consistent with the Code, and thus cannot be an unfair dismissal within the meaning of s 385 of the Act, was dismissed on the basis that, as is well established, the Code is not applicable to a dismissal arising from redundancy[1]. The objection that the dismissal was a genuine redundancy was dismissed because while I found that Birds Basement made an operational decision to remove the position of head chef due to business challenges, Birds Basement did not consult with Mr Hamal in accordance with its obligation to do so pursuant to the Restaurant Industry Award 2020.
• [4] It is therefore necessary to determine the merits of Mr Hamal's application. Having had the benefit of written materials filed by both parties and after hearing further evidence and submissions at the hearing, I suggested to the parties that the merits of the matter might be determined on the papers, after both filed further written submissions. Neither party objected to that course of action, and both parties filed further written submissions in accordance with my Directions. I have considered all of the material submitted by the parties in this matter even where not specifically referred to in these reasons for my decision.

• [5] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:
  1. whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and
  2. whether the person was notified of that reason; and
  3. whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
  4. any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
  5. if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and
  6. the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  7. the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  8. any other matters that the FWC considers relevant.
• [6] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me[2].

Was there a valid reason for dismissal related to Mr Hamal's capacity or conduct?

• [7] Bird's Basement submitted that the circumstances of Mr Hamal's dismissal, arising as it did because the business decided to abolish his position of head chef from its organisational structure, constituted a valid reason for his dismissal.
• [8] It is well established that order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded" and should not be "capricious, fanciful, spiteful or prejudiced" [3].
• [9] While, as I will expand on further below, the manner in which Birds Basement terminated Mr Hamal's employment was lacking, the reason for the dismissal was valid. The decision to remove the head chef position was due to Birds Basement's business and financial challenges. While Mr Hamal says that the business still engages several chefs, I accept that the unique position of "head chef" (which has particular duties and attracts a particular rate of remuneration) is no longer used by the business.
• [10] While valid, the reason for Mr Hamal's dismissal did not relate capacity or conduct. I therefore find this a neutral factor in my consideration as to whether the dismissal was harsh, unjust or unreasonable[4].

Was Mr Hamal notified of the reason for dismissal?

• [11] Notification of the valid reason for dismissal must be given to the employee explicitly and in plain and clear terms. And crucially, this must occur before the decision to terminate the employment is made[5].
• [12] On 13 May 2025, a discussion occurred between Mr Dadon, the owner of the business, and Mr Hamal which occurred because a complaint had been made by Mr Dadon's wife (who worked in the venue) about Mr Hamal's behaviour. The discussion also canvassed some of the pressures the business was facing, and changes that could be made to the business to deal with those pressures, such as reducing hours in the kitchen when there were less than 100 patrons in the venue. Birds Basement submitted that this amounted to "consultation" about the eventual redundancy of Mr Hamal's position. However, I have found this not to be so: it was not said explicitly that there was a likelihood or even a possibility that Mr Hamal's role as head chef might be made redundant in this discussion.
• [13] In Mr Barr's evidence, he said he had a conversation on 23 July 2025 with Mr Dadon in which he said Mr Dadon said "Birds Basement was no longer in a position to support and continue Deependra's (the Applicant's) role as head chef because of the continuing and sustained downturn in trade". At this time, Mr Hamal was absent from work as he was travelling overseas due to his father's ill health. Mr Hamal returned from overseas the next day. Mr Barr contacted him by text and then spoke with Mr Hamal in the afternoon on the phone and told him in this conversation that the role of Head Chef would "immediately cease" and that "the role has been terminated effective immediately".
• [14] Thus, Mr Hamal was not notified of the reason for his dismissal before the decision to terminate him was made - on Birds Basement's own evidence this decision was made on 23 July 2025, and Mr Hamal was told on 24 July 2025.
• [15] The requirement that the Commission consider whether the employee was notified of the reason for their dismissal refers to the "valid reason" in relation to their capacity or conduct. The reason for Mr Hamal's decision did not relate to his capacity or conduct and so while he was not notified of it before the decision to terminate his employment was made, this is a neutral factor in my consideration[6].

Was Mr Hamal given an opportunity to respond to the valid reason?

• [16] An employee protected from unfair dismissal should be notified of a reason for the termination of their employment relating to their capacity or conduct before a decision is taken to terminate that employment so that they can provide a response before the decision is final[7].
• [17] As I have observed above, Mr Hamal was told of his dismissal after the decision had been made and thus, anything he may have said by way of response could not have impacted on the decision that had been made.
• [18] Mr Barr said the conversation he had with Mr Hamal in which he told him his employment was dismissed was terminated abruptly by Mr Hamal. Mr Barr said he later sent a text message to Mr Hamal in which he said, "let's talk further when you reach home". Mr Hamal responded, asking for a written copy of the reasons for his termination, which were sent to him.
• [19] Birds Basement submits that in this way Mr Hamal "refused to engage in further dismission" and that thus what it said was a "consultation process" was truncated as a result of Mr Hamal's attitude and actions, rather than by its own failure to consult.
• [20] I will deal with this submission further below. It does not change the fact that Mr Hamal was not provided with an opportunity to respond to the reason for his dismissal before the decision was made. Again however, this consideration relates to a valid reason about capacity or conduct and is thus a neutral consideration in the present circumstances.

Did Birds Basement unreasonably refuse to allow Mr Hamal to have a support person present to assist at discussions relating to the dismissal?

• [21] In this matter, this factor is not relevant.

Was Mr Hamal warned about unsatisfactory performance before the dismissal?

• [22] In this matter, this factor is not relevant.

To what degree would the size of Birds Basement's enterprise or the absence of human resources management specialists be likely to impact on the procedures followed in effecting the dismissal?

• [23] In considering whether a termination of employment is harsh, unjust or unreasonable, ss 387(f) and (g) of the Act requires that I give consideration to the degree to which the size of Birds Basement's business or the absence of human resources management specialisation or expertise was likely to have impacted on the procedures followed in effecting the dismissal.
• [24] No submissions were made about this matter by either party. It is the case however that Birds Basement is not a large business. However, I do not consider that this excuses the abrupt manner of the termination of Mr Hamal's employment. The decision to make his role redundant occurred while Mr Hamal was overseas and he was not consulted about it. The news was thrust upon him the day of his return from overseas, after nearly three years of employment. A rather forlorn attempt was made to attempt to contact him afterwards. This seems to me to be a rather shoddy way in which to treat an employee of several years standing. The size of the business or the absence of internal specialist expertise does not justify this treatment.
• [25] This factor does not weigh against a finding that the termination of Mr Hamal's employment was harsh, unjust and unreasonable.

• [26] While not a valid reason relating to Mr Hamal's capacity or conduct (within the meaning of s 387(a) of the Act) the reason for the decision to dismiss his employment was defensible and well founded and based on an operational decision driven by a genuine financial pressure on the business. It is appropriate to take this into account pursuant to s 387(h) of the Act[8], and I do so. This weighs against a finding that the termination of Mr Hamal's employment was unfair.
• [27] In addition to the other matters set out in s 387 of the Act, it may often be appropriate to take into account the failure to consult with an employee whose employment is terminated as a result of redundancy in determining whether the termination was harsh, unjust or unreasonable[9].
• [28] As I have mentioned, Birds Basement submit that Mr Hamal's own conduct truncated it's attempt to consult with him. This submission lacks merit. Birds Basement did not consult with Mr Hamal about his dismissal - "consultation" cannot occur when the decision has already been made, and in this case the first mention of redundancy occurred after the decision had been made, when there was no longer any prospect the decision could be changed by feedback obtained through discussion. In so far as Mr Hamal terminated a conversation or "refused" to talk further, it seems to me he was likely upset about having found out about the sudden end of his employment in the way he did.
• [29] Birds Basement submitted that it is "well established" that a finding a dismissal was not a case of genuine redundancy does not automatically lead to a conclusion that the dismissal was unfair. As I have said, it submitted a conclusion of unfairness may be unjustified if the employee's own conducted truncated consultation. It also made submissions about what it described as the "futility principle" suggesting that a finding of unfairness may not be justified when redundancy would have occurred whether or not there was a failure to consult[10]. It also submitted that weight in favour of a conclusion of unfairness might be limited where there was at least some attempt to consult[11], submitting that is the case in the matter before me.
• [30] I have considered these submissions. I accept the proposition that simply because I have found the dismissal of Mr Hamal's employment was not a "genuine redundancy" does not mean it was necessarily unfair. However, I do not agree that the unfairness of Mr Hamal's dismissal is tempered by the proposition that "some consultation was attempted". The evidence does not show any attempt to consult Mr Hamal before the decision was made. The efforts to talk to him were not 'consultation". They were to simply convey the decision that had been taken. Whether consultation would have changed the decision is not the point: the failure to consult was itself unfair.
• [31] The failure to consult with Mr Hamal about his redundancy weighs in favour of a finding that the termination of Mr Hamal's employment was unfair.
• [32] Birds Basement submitted that I should also take into account that he received his full entitlements including notice, that it acted in good faith in making the decision to make the position redundant, and that Mr Hamal was able to obtain alternate employment two weeks and three days following the end of his notice period. I do not consider these matters weigh against a finding that the dismissal was unfair. I do not consider the payment of legal entitlements to be an act of fairness - it is the compliance with legal obligation. I do not consider there was any malice or "bad faith" in Birds Basement's conduct, but this does not weigh for or against a finding of unfairness in this matter. Mr Hamal's success in finding alternative employment will bear on the question of remedy.

Is the Commission satisfied that the dismissal of Mr Hamal was harsh, unjust or unreasonable?

• [33] Having considered each of the matters specified in s 387 of the Act, I consider the termination of Mr Hamal's employment was harsh, unjust and unreasonable. This is particularly because of the failure to consult with Mr Hamal about the redundancy of his role and the abrupt manner in which he was told about it upon only just having returned from overseas. I find Mr Hamal was unfairly dismissed.

• [34] Being satisfied that Mr Hamal
  1. made an application for an order granting a remedy under s 394;
  2. was a person protected from unfair dismissal;

and was unfairly dismissed within the meaning of s 385 of the FW Act, I may, subject to the Act, order Mr Hamal's reinstatement, or the payment of compensation to Mr Hamal.

• [35] Under s 390(3) of the FW Act, I must not order the payment of compensation to Mr Hamal unless: (a) I am satisfied that reinstatement of Mr Hamal is inappropriate; and (b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

• [36] Mr Hamal does not seek reinstatement and his role at Bird's Basement is redundant. He has been fortunate enough to find another job. I find in these circumstances that reinstatement is inappropriate.

Is an order for payment of compensation appropriate in all the circumstances of the case?

• [37] In circumstances where reinstatement is not appropriate, s 390(3)(b) of the Act requires that an order for payment of compensation must not be made unless I am satisfied it is appropriate in all the circumstances of the case. The amount of compensation, if any, is also to be determined taking into account all of the circumstances of the case, including the matters set out in s 392(2). In this matter, as I discuss further below, taking into account all of the circumstances of the case and some of the matters set out in s 392(2), I consider there are several factors which limit the amount of compensation it is appropriate to award Mr Hamal. However, taking into account all of the circumstances of the case I do consider it appropriate to make an order for payment of compensation to Mr Hamal.

Compensation - what must be taken into account in determining an amount?

• [38] Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Hamal in lieu of reinstatement including:
  1. the effect of the order on the viability of Birds Basement's enterprise;
  2. the length of Mr Hamal's service;
  3. the remuneration that Mr Hamal would have received, or would have been likely to receive, if she had not been dismissed;
  4. the efforts of Mr Hamal (if any) to mitigate the loss suffered because of the dismissal;
  5. the amount of any remuneration earned by Mr Hamal from employment or other work during the period between the dismissal and the making of the order for compensation;
  6. the amount of any income reasonably likely to be earned by Mr Hamal during the period between the making of the order for compensation and the actual compensation; and
  7. any other matter that the Commission considers relevant.
• [39] I consider each of these matters below.
• [40] For completeness, I note that s 392(4) provides that the amount ordered must not include a component by way of compensation for shock, distress or humiliation or other analogous hurt caused to the person by the manner of the person's dismissal.
• [41] The amount must not exceed the lesser of half the high-income threshold immediately before the dismissal, or the amount of total remuneration received by the person or to which the person was entitled for any period of employment with the employer during the 26 weeks immediately before the dismissal. In Mr Hamal's case, it said in Birds Basement's F3 Response that he earned $2,115.39 per week, which suggests Mr Hamal earned in the six months preceding dismissal about $55,000.14. The order of compensation I intend to make will not exceed this amount.

Effect of the order on the viability of Birds Basement's enterprise

• [42] The onus is on Birds Basement to provide evidence of the financial situation of the business and the likely effect that an order of compensation will have on the viability of the business[12]. I am in possession of no evidence suggesting an order of compensation in this matter would have an effect on the viability of Birds Basement's enterprise such that it should not be made.

• [43] Mr Hamal was employed by Birds Basement for about 2 years and 9 months. This is a reasonable period of service but, taking into account the other factors I must consider, Mr Hamal's period of service does not bear significantly on the order of compensation that is appropriate in this matter.

Remuneration that Mr Hamal would have received, or would have been likely to receive, if Mr Hamal had not been dismissed

• [44] In determining the remuneration that Mr Hamal would have received, or would have been likely to receive, I am required to address myself to the question of whether if Mr Hamal's employment had not been terminated, the employment would have been likely to continue or would have been terminated at some time by another means, and in doing so, make an assessment as to the anticipated period of employment[13].
• [45] My assessment as to Mr Hamal's anticipated period of employment is that it was likely to be extremely minimal. Mr Hamal's role was made redundant in July 2025. Even if his employment had been terminated fairly (which it was not) it would not have continued long past this time because the role no longer existed.
• [46] However, as I have explained throughout this decision, Birds Basement was obliged to consult with Mr Hamal and should have done so in July 2025 when it said it conducted a "review" leading to the redundancy of Mr Hamal's position.
• [47] We do not know what the product of consultation between Mr Hamal and Birds Basement would have been. At the risk of undervaluing the benefit of consultation in circumstances of redundancy, including in respect to how sensible discussions taking into account employee feedback can often assist to mitigate the effect of operational changes, it seems to me unlikely that consultation would have avoided the redundancy in this matter, and likely that Mr Hamal would have been notified, following the consultation that should have happened, that his role with Birds Basement was terminated.
• [48] However, such a consultation should have included a discussion, and proper consideration being given to Mr Hamal's feedback. An appropriate amount of time for such a process to occur, taking into account the nature and size of the business, is two weeks. This may have meant that Mr Hamal was provided with notice of termination of employment from 7 August 2025, not 24 July 2025 (after which time he would have either been provided with notice or paid in lieu of notice).
• [49] In some circumstances, Mr Hamal may have also been entitled to a severance payment. Birds Basement submitted that it is a small business within the meaning of the Act. Mr Hamal took issue with this submission, believing that there were more than 15 people he worked with. Mr Hamal produced some evidence of this, but at hearing, Mr Barr provided a cogent explanation as to each of the people who worked at the business at the time of dismissal, and in relation to people who Mr Hamal referred to, but who it transpired were hired afterwards. Birds Basement also provided further submissions about how it says some of the people Mr Hamal referred to were not "regular casual" employees and thus should not be counted in relation to the number of employees, for the purposes of the small business definition. Having considered this evidence and these submissions, I am persuaded that Birds Basement had 12 employees at the time of the dismissal, in addition to some casual employees who were not regular. At the time of Mr Hamal's dismissal Birds Basement was a small business and accordingly, the entitlement to be paid a severance payment does not apply[14].

Efforts of Mr Hamal to mitigate the loss suffered by Mr Hamal because of the dismissal

• [50] It does not appear to be in dispute that Mr Hamal sought to obtain alternative employment after his job with Birds Basement ended, and succeeded in doing so, commencing a new job on 26 August 2025. I consider he made immediate and successful efforts to mitigate the loss she suffered as a result of the dismissal.

Amount of remuneration earned by Mr Hamal from employment or other work during the period between the dismissal and the making of the order for compensation

• [51] Mr Hamal obtained a casual role on 26 August 2025 and has since found another part time role. new job is a casual engagement. Up until mid-November 2025 he had earned about $8,876.60 after tax[15].

Amount of income reasonably likely to be so earned by Mr Hamal during the period between the making of the order for compensation and the actual compensation

• [52] Mr Hamal said in his new role his is earning $1313.54 per week (after tax). It appears Mr Hamal will continue to earn about $1313.54 (after tax) per week in his new role.

• [53] Mr Hamal's dismissal, which I consider on balance to have been unfair, has resulted in a reduction in his weekly income. With this in mind, I do not consider the remuneration she has earned since dismissal or is likely to earn before compensation is paid to him should offset against the award of compensation I intend to make in this matter.

• [54] Often the methodology used in Sprigg v Paul Licensed Festival Supermarket[16] is used to calculate the order of compensation that might be made, although it is not mandatory this formula be used[17]. In this matter, I consider that, taking into account the considerations set out in s 392(2) (as I have) the calculation of compensation I intend to order Birds Basement to pay Mr Hamal is straightforward. The amount is two weeks' pay, calculated at $2,115.39 per week less taxation as required by law, plus an amount of superannuation as set out below. I consider this level of compensation is appropriate having regard to all the circumstances of the case[18].

• [55] Given my findings above, I will make an Order that Birds Basement must pay Mr Hamal $4,230.78 less taxation as required by law, plus a superannuation contribution into his nominated fund of $507.69, within 14 days of the date of this decision.

• [56] An Order[19] will issue to that effect.

[1] Ianello v Motor Solutions Australia Pty Ltd [2010] FWA 3125; Paula Groszek v Toyvision International Pty Ltd [2015] FWC 697; Rajnesh Sharma v GTS Australia Pty Ltd [2020] FWC 6556 [28]; Francis Parriman v Waardi Limited [2024] FWC 914 [24]

[2] Sayer v Melsteel Pty Ltd [2011] FWAFB 7498 [14]

[3] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 [373]

[4] UES (Int'l) v Leevan Harvey [2012] FWAFB 5241; Darrell Kay v Fulton Hogan Construction Pty Ltd [2025] FWC 330 [81]

[5] Newton v Toll Transport [2021] FWCFB 3457 [182]

[6] Darrell Kay v Fulton Hogan Construction Pty Ltd [2025] FWC 330 [81]

[7] Crozier v Palazzo Corporation (1996) 98 IR 137 [73]

[8] UES (Int'l) v Leevan Harvey [2012] FWAFB 5241 [47]; Darrell Kay v Fulton Hogan Construction Pty Ltd [2025] FWC 330 [79]

[9] UES (Int'l) v Leevan Harvey [2012] FWAFB 5241 [48]; Willian Gosling v Marine Manning Services Pty Ltd [2018] FWC 25 [66] - [69].

[10] In relation to this "principle" Birds Basement referred to a decision of Blair C in Kaysal v DBM Handrails Pty Ltd [2010] FWA 8426. While the citation matches a decision of Blair C which was concerned with a question of genuine redundancy, I cannot align Birds Basement's submission with the Commissioner's decision. The Commissioner did not find, as Birds Basement submitted, that the dismissal was "not unfair".

[11] See Darrell Kay v Fulton Hogan Construction Pty Ltd [2025] FWC 330 [85]

[12] Vickery v Assetta [2004] FCA 555; D.A. Moore v Highpace Pty Ltd (1998) Print Q0871

[13] He v Lewin [2004] FCAFC 161 [58]

[14] Fair Work Act 2009 s 121(1)(b)

[15] Mr Hamal provide after tax figures in relation to his remuneration since dismissal

[16] [1998] AIRC 989; (1998) 88 IR 21

[17] Hanson Construction Materials Pty Ltd v Darren Pericich [2018] FWCFB 5960 [39]

[18] Fair Work Act 2009 s 392(2); Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206 [17]

[19] PR794178

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