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[2020] FWC 3657
plaintiff. The Commission ordered Dapto Fish Feast to pay Mr Allan $7,246.80 less appropriate tax, in three fortnightly instalments of $2,415.60 less appropriate tax. The first instalment was due no later...
The Commission found that Mr Allan's regular casual work did not simply end without a dismissal: the new owner stopped offering him the shifts he had regularly worked. The business downturn was relevant, but the employer did not consult him as required by the Fast Food Industry Award. The Commission also found procedural shortcomings, including that he was not given a chance to respond. It excluded the Respondent's late evidence because Mr Allan had no fair opportunity to answer it. The dismissal was found harsh and unjust. The Commission awarded six weeks' pay, totalling $7,246.80 less tax, rather than reinstating him.
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1 cited instrument linked from this judgment.
2,336 words · generated 01/10/2026
Mr Nikolas Allan worked for Dapto Fish Feast from 26 March 2015. The decision records that he was a casual employee who said he worked, on average, 50 hours each week on a regular and systematic basis, and that he had been promoted to Manager in 2018 ([2]–[3]). The business was sold in March 2020. Its four existing employees, including Mr Allan, were retained by the new owner ([13]).
Mr Allan continued to work in his former position for 38 hours during the first week after the sale. He received no shifts in the second week and said the new owner dismissed him by text message on 2 April 2020 ([14]). Later messages referred to the business being quiet, customers being fewer, and the owner having cut other workers. One message said, “I cannot Kip u work for the campany for now” ([18]). The Commissioner regarded the downturn as associated with the timing of the purchase and the COVID-19 pandemic ([29]).
The case also had an important procedural feature. Directions required Mr Allan to file his material by 10 June 2020 and the Respondent to file by 1 July 2020 ([6]). Mr Allan complied, but the Respondent did not. The Commission gave the Respondent an extension to 9 July, warning that the matter might be determined on the material before the Commission ([7]–[8]). Mr Gilligan sent an email with the Respondent's version and text-message screenshots on 12 July, the day before the hearing ([9]). The Commissioner declined to accept it because it was late and Mr Allan had not had an opportunity to review or refute it ([11], [37]).
The Commission found that Mr Allan was protected from unfair dismissal and had been dismissed when the Respondent stopped offering his regular shifts ([20]). It found that the Respondent had not complied with the Award's consultation provision and that the termination was not a genuine redundancy ([23]). After considering the fairness criteria, the Commissioner found the dismissal harsh and unjust ([39]). Reinstatement was not sought and was considered inappropriate. The Commission awarded six weeks' pay, $7,246.80 less appropriate tax, by three instalments ([41], [49]–[50]).
This was a Fair Work Commission decision, not a court judgment. The central statutory assessment was whether the dismissal was harsh, unjust or unreasonable under s 387 of the Fair Work Act 2009. The decision reproduced the statutory criteria, which include whether there was a valid reason, whether the employee was notified and given an opportunity to respond, and the effects of the employer's size and HR resources ([12], [25]).
The Commission first treated the working arrangement in substance. Although Mr Allan was described as casual, the decision records his regular and systematic pattern of work over more than five years. After the sale, he worked 38 hours in one week and then received no shifts. The Commissioner found that ending the regular offers of work amounted to dismissal on these facts ([14], [18]–[20]). The decision also records that the Applicant continued in his previous role after the business sale and that the transfer-of-business provisions applied ([13], [16]–[17]).
The business downturn was a relevant explanation for the reduction in work. The messages referred to low business, an inability to pay workers and cuts to other staff ([18]). The Commissioner acknowledged that the Respondent had bought the business shortly before the pandemic and had taken drastic steps to reduce costs ([29]). But the explanation did not resolve the question of procedural fairness or the Award obligation to consult.
The Award's clause 8 required notice and discussion where an employer made a definite decision to make major changes likely to have significant effects on employees. The listed effects included termination and alteration of hours ([22]). The Commissioner found the Respondent had not complied with this consultation provision. Although the apparent downturn suggested the Applicant's role may have become redundant, the Commission concluded that failure to consult meant the termination could not be characterised as a genuine redundancy ([21]–[23]).
The analysis under s 387 considered several separate factors. The Applicant was notified that the business downturn was the reason for ending his work ([30]), but was not given an opportunity to respond ([31]). There was no formal meeting ([32]). The termination was not due to performance issues, so the warning factor was not engaged in the same way ([33]). The Respondent was a small business and had no dedicated HR employees; the Commissioner found no appropriate HR procedures had been followed ([34]–[35]). The Commissioner also treated consultation as important to the statutory “fair go” objective, concluding that Mr Allan had not received one ([36]).
The Commissioner acknowledged that restructuring would normally provide a valid reason to terminate employment, but concluded that, in this case, the failure to consult about the apparent restructure meant the Respondent did not have a valid reason and had not provided appropriate procedural fairness ([38]). That reasoning should be read in the context of this decision and its findings, rather than as a general statement that any failure to consult necessarily invalidates every restructuring reason.
The decision applied statutory provisions and an Award clause already set out in its reasons. It did not announce a new statutory test. The relevant framework included s 382, which addresses when a person is protected from unfair dismissal; s 386, which addresses when a person is dismissed; s 389, which defines genuine redundancy; and s 387, which lists the matters to consider when assessing whether a dismissal was harsh, unjust or unreasonable ([12]).
For genuine redundancy, the decision reproduced s 389(1), including the requirement that the employer comply with any applicable award or enterprise agreement obligation to consult. It then applied clause 8 of the Fast Food Industry Award, which required notice and discussion about major changes with likely significant effects, including termination and changes to hours ([22]–[23]). The result was that the Commission did not characterise this termination as a genuine redundancy.
The reasons also referred to Byrne v Australian Airlines for the observation that “harsh”, “unjust” and “unreasonable” can overlap but are distinct concepts ([26]). The Commissioner cited Australian Meat Holdings Pty Ltd v McLauchlan as explaining that distinction in terms of an employee's guilt, the reasonableness of the decision-making, and the consequences for the employee ([27]). Those authorities informed the statutory analysis, but the decision's actual conclusion rested on the findings about Mr Allan's work pattern, the failure to consult, and the process followed.
For remedy, the Commission applied ss 390–392. The decision records that compensation is available where reinstatement is inappropriate and identifies factors relevant to calculating the amount, including service, likely earnings, mitigation and the employer's viability ([40]). The Commissioner said the Applicant did not seek reinstatement and agreed that reinstatement was inappropriate ([41]). The Commissioner applied the Sprigg formula and considered the possibility that consultation could have continued employment for another two weeks, the Applicant's four-week notice period, and the Respondent's financial position ([42]–[47]). The disposition was six weeks' pay ([49]).
The supplied decision does not describe the law before or after this case in a broader historical sense, and it does not provide later authorities. Accordingly, this account is limited to the statutory and Award framework as set out and applied in the decision itself.
At [20], the Commissioner found that Mr Allan “has been dismissed by the Respondent by no longer offering him the regular” shifts he had worked for a considerable time. In plain English, the Commission looked beyond the casual label and treated the end of the regular work pattern as a dismissal in the circumstances it found.
At [23], the Commissioner said the Respondent had not complied with the Award consultation provision and, “[t]herefore”, the termination could not be characterised as a genuine redundancy. This ties the Commission's conclusion to the particular consultation requirement in clause 8 and its finding that the employer had not followed it.
At [36], the Commissioner said Mr Allan “did not receive a fair go” and “was entitled to be consulted about the change to his employment circumstance”. In context, the passage reflects the Commissioner's application of the Award consultation obligation and the unfair dismissal framework, not a separate rule detached from those sources.
At [38], the Commissioner recognised that restructuring would “normally” provide a valid reason, but found that failure to consult about the apparent restructure meant there was no valid reason in this case and that procedural fairness was inadequate. The passage shows how the Commission connected the business rationale with the manner in which the change was implemented.
At [37], the Commissioner explained that it would have been procedurally unfair to consider material sent on the eve of the hearing. In plain English, the Commission did not treat the late email as evidence the Applicant had to meet without a chance to examine and answer it.
At [49]–[50], the Commission ordered six weeks' pay, $7,246.80 less appropriate tax, in three fortnightly instalments. These paragraphs state the operative outcome and instalment dates.
The decision is most directly relevant to fact patterns involving a casual employee whose work, despite the casual description, has been regular and systematic over a significant period, followed by the employer stopping the usual offers of shifts. Here, the Commission relied on more than five years of regular and systematic casual work and a reduction to zero hours ([14], [18]–[20]). The decision does not establish that every reduction in shifts is a dismissal; its finding depended on the circumstances it described.
It is also relevant where a business says it has reduced staffing because of a downturn or restructure, but an applicable award requires consultation about major workplace change. The Award clause reproduced in the decision included termination and alteration of hours among potential significant effects ([22]). The Commission found that the lack of consultation prevented the termination from being characterised as a genuine redundancy on these facts ([23]).
The decision may also be useful when analysing a dismissal process involving no opportunity for an employee to respond, no formal meeting, and no appropriate procedures, particularly in a small business without dedicated HR staff. Those factors were recorded in the s 387 assessment ([31]–[35]).
Finally, the procedural history matters where evidence is filed after directions and an extension have expired, particularly immediately before a hearing. The Commissioner excluded the late material because the Applicant would have had no opportunity to review or refute it ([11], [37]). The decision supports attention to both compliance with procedural directions and fairness to the other party when late material is tendered.
The supplied text contains no subsequent decisions and no account of later judicial or Commission treatment of Mr Allan v Dapto Fish Feast. It is therefore not possible, from this source alone, to say whether later courts or Commission members followed, distinguished, limited or questioned it.
The decision itself cites four authorities. It discusses Byrne v Australian Airlines in explaining the separate but potentially overlapping meanings of harsh, unjust and unreasonable ([26]). It cites Australian Meat Holdings Pty Ltd v McLauchlan for a summary of those concepts ([27]). It cites Selvachandran v Peteron Plastics Pty Ltd when setting out the meaning of a valid reason ([28]). It applies the Sprigg formula when calculating compensation ([43]). Those are authorities used in this decision; they do not establish how later cases treated this decision.
The reasons are expressly fact-sensitive in their application. In particular, the conclusion that there was no valid reason followed the failure to consult about an apparent restructure, while the conclusion that there was a dismissal rested on the stopping of a long-standing pattern of regular shifts ([20], [38]). Any later-treatment assessment would require later decisions not included in the provided material.
The decision does not set out a detailed examination of each element of s 311. It records that the new owner retained the existing employees and says the transfer-of-business provisions were satisfied ([13]); later it specifically refers to ss 311(b) and (c) and the Applicant continuing in his former role ([16]–[17]). The source does not explain in detail the connection between the old and new employers or identify the precise transfer arrangement.
The reasons do not explain the evidence or calculation behind the six-week figure in detail. They identify the Sprigg formula, two additional weeks in which consultation might have occurred, four weeks' notice, the Applicant's service, the compensation cap and the Respondent's viability ([43]–[47]). The decision then orders six weeks' pay ([49]). The supplied text does not provide a complete calculation breakdown showing how each factor produced that figure.
The decision notes the Respondent's small-business status and says it was exempt from the redundancy provisions of the Act ([24], [45]), but the source does not explore the relationship between that point, the Award consultation obligation, and the Commission's finding that the termination was not a genuine redundancy. The Commission's stated reasoning is that the Award consultation provision applied and had not been complied with ([22]–[23]).
The decision also does not say whether the Applicant worked exactly 50 hours in each week. It records that he claimed an average of 50 hours per week, and separately records 38 hours in the first week after the sale ([3], [14]). This distinction may matter when considering the underlying evidence, but no further findings about his weekly hours appear in the supplied reasons.
Finally, the judgment states that the late email would not be accepted because of the timing and procedural unfairness, but it does not detail the contents of the email beyond its provision of the Respondent's version and screenshots ([9]–[11]). The reasons therefore do not assess the substance or potential evidentiary weight of that material.
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s.394 - Application for unfair dismissal remedy
[1] Mr Nikolas Allan (the Applicant) has made an application (the Application) to the Fair Work Commission (the Commission) claiming that he has been unfairly dismissed by Dapto Fish Feast (the Respondent).
[2] The Applicant was employed by the Respondent on 26 March 2015 and terminated on 2 April 2020.
[3] The Applicant was a casual employee and claims to have worked, on average, 50 hours per week, on a regular and systematic basis. The Applicant was promoted to the position of Manager in 2018.
[4] At the Conciliation/Directions Conference (the Directions Conference), which I convened on 20 May 2020, the Respondent was represented by its new owner, Ms Uura. A French speaking interpreter was provided by the Commission to assist Ms Uura in the proceeding.
[5] At the conclusion of the Directions Conference, Ms Uura advised that she will be providing the written Directions to her lawyer when they are sent and that she intends to oppose the Application.
[6] The Commission issued the following Directions:
"1. The Applicant (Mr Nikolas Allan) is directed to file with the Fair Work Commission, and serve on the Respondent, an outline of submissions, witness statements and other documentary material the Applicant intends to rely on in support of their application in this matter by no later than 4.00pm on 10 June 2020.
2. The Respondent (Dapto Fish Feast) is directed to file with the Fair Work Commission, and serve on the Applicant, an outline of submissions, witness statements and other documentary material the Respondent intends to rely on in opposition to the application in this matter by no later than 4.00pm on 1 July 2020.
3. The Applicant (Mr Nikolas Allan) is directed to file with the Fair Work Commission, and serve on the Respondent, any witness statements and other documentary material in reply to the Respondent's witness statements and documents by no later than 4.00pm on 8 July 2020."
[7] The Applicant submitted his materials in accordance with the Directions on 10 June 2020. The Respondent failed to submit any material on 1 July 2020.
[8] My Associate sent the Respondent an email on 7 July 2020, which provided the Respondent with additional time to submit any material.
RE: U2020/4075 - Allan, Nikolas v Dapto Fish Feast
I refer to the attached Directions issued by the Commissioner on 20 May 2020.
The Respondent (Dapto Fish Feast) is directed to file with the Fair Work Commission, and serve on the Applicant, an outline of submissions, witness statements and other documentary material the Respondent intends to rely on in opposition to the application in this matter by no later than 4.00 pm on 1 July 2020.
If you do not file with the Fair Work Commission and serve on the Applicant, an outline of submissions, witness statements and other documentary material that you intend to rely on in opposition to the application in this matter before 4.00 pm on 9 July 2020, the matter may be determined on the material before the Commission.
[9] On Sunday 12 July 2020, a Mr Gilligan sent an email to my Chambers in response to the email of 7 July 2020. This email providing the Respondent's version of events and attached a few screen shots of text messages that were sent between the parties.
[10] At the Conference immediately before the Hearing on 13 July 2020, the Applicant's representative advised me that the Applicant was happy for the matter to be determined on the papers, but the Commission should not take into account the email from Mr Gilligan.
[11] At the Hearing, I advised the parties that I would not be accepting the email from Mr Gilligan as a submission in the matter as it was submitted outside of the Commission provided extension. Also, it would be procedurally unfair to the Applicant to allow the material to be considered when the Applicant had not had the opportunity to review or refute this submission. Additionally, I advised that the matter would be determined "on the papers.'
[12] The provisions of the Act that are relevant to this decision are as follows:
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(b) to establish procedures for dealing with unfair dismissal that:
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
(a) the person's employment with his or her employer has been terminated on the employer's initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person's employment, to avoid the employer's obligations under this Part.
(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.
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements."
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) 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
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) 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
(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) 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
(g) 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
(h) any other matters that the FWC considers relevant.
[13] The Respondent purchased the business in March 2020. The existing four employees were retained by the new owner, including the Applicant, satisfying the transfer of business provisions of the Act (s 311).
[14] The Applicant has worked on a regular and systematic casual basis for the Respondent for a period of more than five years. On or about 16 March 2020, the Respondent was sold. The first week after the sale, the Applicant continued to work, in his pre-sale position for 38 hours. On the second week after the sale the Applicant did not receive any shifts. It was the Applicant's evidence that he was terminated by the Respondent via text message (the Text Message) on 2 April 2020.
[15] After receiving the Text Message, the Applicant attended the workplace to discuss his alleged dismissal with the Respondent's new owner. The Applicant contended that he was abused by the owner, so he left the workplace.
[16] The Applicant continued to work for the Respondent after the business had been sold in his former role.
[17] I am satisfied that section 311(b) and (c) of the Act have been satisfied and that the Applicant's employment transfers from the old owner to the new owner.
[18] The Applicant's regular and systemic causal employment was dramatically changed by the Respondent. The Applicant claims that he regularly worked 50 hours per week. In the week beginning 30 April 2020, the Applicant's hours were cut to zero. The following text messages were sent from the Respondent to the Applicant:
"Nick very very quiet nothing to cut today no need u coming today tomorrow and Saturday I work with my family the business no enough to pay every one I'm sorry maybe late one I will do ur transfer to nite . I cut 4 workers already" (sic)
"Nick the situation go very bad with coronavirus I cannot Kip u work for the campany for now so bad now I have cut 3 workers to kip going little bit the business to survive no good. I will let you know if we need you again" (sic)
"No for now the business can't pay 3 workers for now I have to cut again 1orr 2 more" (sic)
"The business can't pay very bad no much Costomers" (sic)
[19] I am satisfied that the Respondent no longer wanted to employ the Applicant.
[20] I am satisfied the Applicant was protected from unfair dismissal and has been dismissed by the Respondent by no longer offering him the regular shits that he had worked for a considerable length of time.
[21] It would appear that the Applicant's role has been made redundant, due to a downturn in business.
[22] The Respondent is bound by the Fast Food Industry Award (the Award). Section 8 of the Award states:
8.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a) give notice of the changes to all employees who may be affected by them and their representatives (if any);and
(b) discuss with affected employees and their representatives (if any):
(iii) measures to avoid or reduce the adverse effects of the changes on employees; and
(c) commence discussions as soon as practicable after a definite decision has been made.
8.2 For the purposes of the discussion under clause 8.1(b),the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
8.3 Clause 8.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer's interests.
8.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b).
8.5 In clause 8:
significant effects, on employees, includes any of the following:
(b) major changes in the composition, operation or size of the employer's workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(f) the need for employees to be retrained or transferred to other work or locations; or
8.6 Where this award makes provision for alteration of any of the matters defined at clause 8.5,such alteration is taken not to have significant effect.
[23] I am satisfied that the Respondent has not complied with the consultation provision of the Award. Therefore, the termination of the Applicant cannot be characterised as a genuine redundancy.
[24] I am satisfied that the Respondent is a small business. I am satisfied that the Respondent did not comply with the Small Business Fair Dismissal Code because there was no valid reason given to the Applicant in relation to his conduct or capacity.
[25] I find that the Applicant has been dismissed. To determine whether the dismissal was harsh, unjust or unreasonable requires an analysis of section 387 of the Act.
[26] When considering whether a termination of an employee was harsh, unjust or unreasonable, the oft-quoted joint judgement of McHugh and Gummow JJ in Byrne v Australian Airlines (Byrne) (1995) 185 CLR 410 is of significance:
"It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.
... In Lane v Arrowcrest Group Pty Ltd, von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said it would be astonishing if the employer could not resist an allegation that the dismissal was harsh, unjust or unreasonable, within the meaning of the relevant award, by pointing to those facts discovered after the dismissal, so long as they concerned circumstances in existence when the decision was made. His Honour concluded:
"Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer's state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred.""[1]
[27] In analysing Byrne, a Full Bench of the Australian Industrial Relations Commission in Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 held:
"The above extract is authority for the proposition that a termination of employment may be:
• unjust, because the employee was not guilty of the misconduct on which the employer acted;
• unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or
• harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct"[2]
[28] The meaning of the phrase "valid reasons" has been universally drawn from the judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371:
"In broad terms, the right is limited to cases where the employer is able to satisfy the Court of a valid reason or valid reasons for terminating the employment connected [2019] FWC 3332 10 with the employee's capacity or performance or based on the operational requirements of the employer. ...
Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid". A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: "2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value." In the Macquarie Dictionary the relevant meaning is "sound, just, or well founded; a valid reason".
In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly..."[3]
[29] It would appear that the Respondent bought the business just before the COVID-19 pandemic. This unfortunate timing resulted in a severe downtown in the business. The Respondent undertook drastic action in an attempt to lower the costs of the business. I am unaware if the Respondent was eligible for, or took advantage of, any of the financial assistance which was available from the Federal Government.
[30] The Applicant was notified of the reason for his termination being the significant downturn of the business.
[31] The Applicant was not provided with an opportunity to respond.
[32] There was no formal meeting between the parties.
Section 387(e) Warning about unsatisfactory performance
[33] The Applicant's termination was not as a result of any performance issues.
Section 387(f) Size of Enterprise - Procedures Followed
[34] The Respondent is a small business in a shopping centre in Dapto. No appropriate human resource procedures were followed.
[35] The Respondent did not have any dedicated human resource employees.
[36] The COVID-19 pandemic has resulted in an unprecedented upheaval of global labour relations. Whilst workplace restrictions and industrial principles have been appropriately relaxed during this period, the underlying notion of a 'fair go' has been maintained. I find that the Applicant did not receive a fair go. He was entitled to be consulted about the change to his employment circumstance. This did not occur.
[37] The Respondent failed to comply with the Directions of the Commission at first instance and when the Commission provided an extension for the Respondent to file submissions and evidence. It would have been procedurally unfair to the Applicant for the Commission to take into account the email submitted by the Respondent at 2:13 pm Sunday, on the eve of the Hearing.
[38] Normally, the restructuring of a business would provide the Respondent with a valid reason to terminate the Applicant. However, on the basis that the Respondent failed to consult with the Applicant on an apparent restructure of the business, the Respondent did not have a valid reason to terminate the Applicant and did not provide the Applicant with an appropriate level of procedure fairness.
[39] I find that the termination of the Applicant was harsh and unjust.
[40] The relevant provisions of the Act in relation to remedy are:
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person's reinstatement, or the
(a) the FWC is satisfied that the person was protected from unfair dismissal
(see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(1) An order for a person's reinstatement must be an order that the person's employer
at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed
(b) appointing the person to another position on terms and conditions no less
favourable than those on which the person was employed immediately before
(a) the position in which the person was employed immediately before the
dismissal is no longer a position with the person's employer at the time of the
(b) that position, or an equivalent position, is a position with an associated
entity of the employer; the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed
(d) appoint the person to another position on terms and conditions no less
favourable than those on which the person was employed immediately before
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do
so, the FWC may also make any order that the FWC considers appropriate to maintain
(b) the period of the person's continuous service with the employer, or (if
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do
so, the FWC may also make any order that the FWC considers appropriate to cause the
employer to pay to the person an amount for the remuneration lost, or likely to have
(4) In determining an amount for the purposes of an order under subsection (3), the
(a) the amount of any remuneration earned by the person from employment or
other work during the period between the dismissal and the making of the order
(b) the amount of any remuneration reasonably likely to be so earned by the
person during the period between the making of the order for reinstatement and
(1) An order for the payment of compensation to a person must be an order that the
person's employer at the time of the dismissal pay compensation to the person in lieu
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's enterprise; and
(b) the length of the person's service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
(3) If the FWC is satisfied that misconduct of a person contributed to the employer's decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
(4) The amount ordered by the FWC to be paid to a person under subsection (1) 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.
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period - the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
[41] The Applicant is not seeking reinstatement. I agree that reinstatement is not an appropriate remedy in this circumstance.
[42] The Respondent is a small business and is suffering financial pressure as a result of COVID-19.
[43] In reaching an appropriate level of compensation to be paid, I have adopted the principle of the Sprigg formula [4] in reaching my conclusion.
[44] I am satisfied that had the Applicant be consulted in an appropriate manner then his employment would have continued for 2 additional weeks. During this 2-week period, the Respondent could have advised the Applicant of the financial concerns and discussed alternatives to make the business profitable and possibly have maintained the Applicant's employment. I have taken this into account.
[45] Based on the Applicant's length of service, the Applicant was entitled to 4 weeks' notice (section 117 of the Act). On the basis that the Respondent is a small business, it is exempt from the redundancy provisions of the Act. I have taken this into account.
[46] I am satisfied that the amount of compensation to be paid is less than the compensation cap and will not affect the viability of the Respondent.
[47] The amount I have calculated does not include an amount for shock, distress or humiliation.
[48] The Applicant was unfairly dismissed.
[49] In accordance with section 392(1) of the Act, I have decided to award the Applicant 6 weeks' pay ($ 7,246.80 less appropriate tax).
[50] In accordance with section 393 of the Act, the Respondent is required to pay the Applicant $7,246.80 (less appropriate tax) in three fortnightly instalments of $2,415.6 (less appropriate tax). The first instalment is to be paid no later than 16 September 2020. The second instalment is to be paid no later than 30 September 2020. The third instalment is to be paid no later than 14 October 2020.
[51] I so Order.
[2] (1998) 84 IR 1, 10.
[3] [1995] IRCA 333; (1995) 62 IR 371, 372-3.
[4] Sprigg v Paul's Licensed Festival Supermarket Print R0235 (AIRCFB, Munro J, Duncan DP, Jones C, 24 December 1998) at para. 35, [(1998) 88 IR 21]
Printed by authority of the Commonwealth Government Printer
Mr Nikolas Allan
Dapto Fish Feast [2020] FWC 3657
(1995) 185 CLR 410
(1998) 84 IR 1
(1995) 62 IR 371
(1998) 88 IR 21
The Commission ordered Dapto Fish Feast to pay Mr Allan $7,246.80 less appropriate tax, in three fortnightly instalments of $2,415.60 less appropriate tax. The first instalment was due no later than 16 September 2020, the second no later than 30 September 2020, and the third no later than 14 October 2020 ([49]–[51]).