s.394 - Unfair dismissal

Application for an unfair dismissal remedy - genuine redundancy - application dismissed

• [1] Tom Byron has made an application for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Act). His former employer, iSelect Pty Ltd (iSelect), objects to the application on the ground that the dismissal was a case of 'genuine redundancy' as defined in s 389 of the Act, and says that the application must therefore be dismissed.

• [2] Mr Byron was employed by iSelect as a team leader in the company's health insurance business supervising a team of sales consultants. Like some other team leaders, Mr Byron worked from home, and had done so since the COVID-19 pandemic. His team of sales consultants also worked from home. Mr Byron's evidence was that on 25 February 2025, he received a letter from iSelect stating that his position was redundant and that his employment would end on 28 February 2025. Mr Byron did not believe that his position was redundant. He had been a high performer who had brought in substantial revenue. He believed that his redundancy was not necessary because other team leaders, including ones who worked from home, were still employed in their same roles. He said that if his position had been genuinely redundant, the roles of others would have been impacted in the same way, but that he was singled out for redundancy. Mr Byron said that the process leading to his dismissal lacked transparency and was unfair, and that although he was offered the possibility of an office-based team leader role in the city, this was not reasonable because it would involve a very long commute into the city.

• [3] Mr Byron said that there may have been an opportunity to explore redeployment options, as he had worked in several different parts of the business, and that he was flexible and open to all options, but no conversations about redeployment ever occurred. Mr Byron said that there were many people in the corporate team who were still working from home, but that there was no discussion about redeploying him to a remote corporate role. Mr Byron said that he believed that he was made redundant because he had become inconvenient, and that the new owners of the business wanted people to work in the office. He said that while he enjoys working in the office, this was not feasible for him.

• [4] Andres Gutierrez, the general manager of iSelect's health insurance business, gave evidence that in late 2024, the business was experiencing severe problems. There had been six consecutive years of revenue decline. There was high attrition among new hires, particularly those working remotely. Team leaders who worked from home were unable to provide real time coaching and supervision to support their consultants. Mr Gutierrez said that although remote work had been necessary during the COVID-19 pandemic, by late 2024 it was clear that iSelect could no longer sustain this model. One of iSelect's related entities, Compare the Market, was operating successfully with an office-based model, with lower staff turnover and higher revenue than iSelect. The chief executive officer (CEO) of iSelect decided to return to an office-based operating model. On 25 November 2024, a full staff briefing was held for all sales consultants and team leaders, including Mr Byron. Staff were told that the health business would move to an office-based model from January 2025; that all hiring would be for on-site roles in the city; and that existing remote employees would over time consolidate into the Melbourne office. Mr Gutierrez said that on 26 November 2024, the CEO sent a written summary of the new arrangements to all staff, including Mr Byron, confirming what had been said at the briefing and including a link for staff to vote on their roster preferences.

• [5] Robin Power, iSelect's sales manager for the health business, gave evidence that after the staff briefing on 25 November 2024, he had a discussion with Mr Byron about what the new arrangements would mean for him as a remote team leader. He told Mr Byron that iSelect would no longer be hiring remote sales consultants, that the number of remote sales consultants would diminish, and that his role would eventually become redundant. He said that Mr Byron had three options: to redeploy to an office-based team leader role in Melbourne, with a financial relocation support package; to apply for a voluntary redundancy; or to remain in his current role for the time being, with full awareness that a redundancy would occur at a later stage once his team of sales consultants fell below a viable number. Mr Byron replied that he might reconsider a voluntary redundancy in the new year. Mr Power then sent Mr Byron an email to confirm the discussion, together with an estimate of his voluntary redundancy payment, should he elect this option. Mr Power said that at a meeting on 10 December 2024, he spoke to staff about the return to office arrangements that would commence in January 2025. Afterwards, he sent a copy of the written presentation to Mr Byron, who was on leave that day.

• [6] The evidence of Mr Power and Mr Gutierrez was that by December 2024, the sales consultants in Mr Byron's team had reduced from around 10 to 4. Mr Byron took long service leave from 10 December 2024 to 17 January 2025. The size of his team reduced further, to only 2 consultants, who were assigned to another team. By January 2025, Mr Byron no longer had a team reporting to him. He was assigned to training duties. Mr Power's evidence was that after Mr Byron returned from leave, he had regular discussions with him about his ongoing employment, emphasising that he could move to an office-based team leader role, but that there were no available remote roles to which he could be redeployed. Mr Byron said that he understood this but could not work in the office.

• [7] Mr Power said that while Mr Byron's role had in real terms already become redundant in January 2025, iSelect continued his employment into February as a courtesy, to give him time to consider redeployment to an office-based team leader role. In early February 2025, Mr Power told Mr Byron that they were approaching a 'tipping point' in respect of his ongoing employment and that the company was preparing to commence redundancies. Mr Power asked Mr Byron again whether he would consider working in the office but he declined. On 24 February 2025, Mr Power told Mr Byron that a decision on his redundancy was imminent and asked for his final position on redeployment. Mr Byron confirmed that working in the office was not an option for him. On 25 February 2025, at the direction of Mr Gutierrez, Mr Power met with Mr Byron and told him that his position was redundant, and that because he had not accepted redeployment to an available office-based team leader role, his employment would be terminated. Mr Power said that the conversation was professional and respectful. Mr Byron told him that he understood the rationale for the decision and that he had been expecting it. He did not raise any objections. Mr Byron was paid 12 weeks of severance pay.

• [8] Mr Power said that Mr Byron was not singled out for redundancy and that another remote team leader was made redundant at the same time for the same operational reasons. He said that two remote team leaders remained employed by iSelect but their jobs were still needed. Both still had teams to manage. Mr Power said that both of these team leaders had been told that their remote roles would not continue indefinitely.

• [9] If the Commission is satisfied that a dismissal was a case of 'genuine redundancy', it follows that the dismissal was not unfair (see s 385). Section 389 states that a person's dismissal was a case of genuine redundancy if 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' (s 389(1)(a)), and the employer complied with any obligation in a modern award or enterprise agreement to consult about the redundancy. Section 389(2) then states that 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 the employer's enterprise or that of an associated entity.

• [10] I find that iSelect no longer wanted Mr Byron's job to be performed by anyone because of the changes in its operational requirements. The immediate change in these requirements was that it did not need a team leader to manage Mr Byron's team because that team no longer existed. After he returned from long service leave, Mr Byron was given training work, but this work also dissipated. To the extent that this had temporarily constituted a new job, it was no longer needed either. The underlying change in the company's operational requirements was its decision, based on business needs, to move to an in-office working model in order to improve business performance. Mr Byron believed that, because the company still needed some remote team leaders, his job could not have been redundant, but this is not the case. The other remote team leaders' roles were still required. Mr Byron's was not, because he had no team.

• [11] Mr Byron said that he was a good performer. The company did not dispute this. But that does not alter the fact that his remote team leader position was not needed. There is no rule that requires an employer to keep higher performing employees until all others have been retrenched. Section 389 states that in a 'genuine redundancy', the employer no longer needs the relevant job to be performed by anyone. It is clear that Mr Byron was dismissed because iSelect no longer wanted his job done by anyone, and that this was because of its changed operational requirements. Without these changed requirements, Mr Byron would not have been dismissed.

• [12] Mr Byron said that because iSelect had continued to employ him in January and February 2025, this must indicate that it still required his position. I disagree. It is clear that it did not need his team leader position because he had no team to lead. And it no longer required the temporary training work to be done. Mr Byron also said that during the consultation process, iSelect had made an in-office team leader redundant and retained a remote team leader, which contradicted the company's reasoning about the need for his dismissal. But there is no contradiction. Mr Power and Mr Gutierrez said that this redundancy, which occurred in a different department, involved a situation where two team leader positions needed to be reduced to one, and the office-based team leader had volunteered for redundancy. There was still a need for the remaining team leader's role.

• [13] Mr Byron was covered by the Banking, Finance and Insurance Award 2020 (Award). Clause 28 of the Award requires employers to consult with employees about major workplace changes that are likely to have significant effects on their employment. This includes termination of employment. Employers are required to have discussions with employees about the changes, including measures to avoid or reduce any adverse effects. For the purposes of these discussions, employers must give employees the relevant information in writing and consider matters raised by employees. I find that iSelect complied with these requirements. I accept the evidence of Mr Gutierrez and Mr Power about the meetings that were held and the correspondence that was sent to Mr Byron about the changes. In my view, they gave him sufficient information to allow him to understand the changes and their impact on his employment and engage in the discussions contemplated by clause 28 of the Award.

• [14] I do not consider that it would have been reasonable in the circumstances for iSelect to redeploy Mr Byron to another position within its enterprise or an associated enterprise. The only evidence of available work was in the office-based team leader work in Melbourne which Mr Byron did not want. Mr Byron suggested that he might have been able to perform corporate work remotely. But there is no evidence of any particular corporate role or work that Mr Byron could have done.

• [15] I conclude that Mr Byron's dismissal was a case of 'genuine redundancy' as defined in s 389 of the Act. He was therefore not unfairly dismissed. But in any event, had I reached a different conclusion on this point, I would nevertheless have determined that the dismissal was not unfair, taking into account the considerations in s 387. The reason for dismissal was not one related to capacity or conduct for the purposes of s 387(a), but it was nevertheless a good and legitimate reason. Mr Byron's job was not needed. This is a relevant and weighty consideration (see s 387(h)). In my view none of the other considerations in s 387 carry any weight in this matter. As to the broader circumstances, I consider the process to have been a detailed and fair one. To the extent that it might have been argued that there were any shortcomings in the consultation, these could only have been minor and also inconsequential, as they could not have altered the outcome. I note that Mr Byron was paid 12 weeks of severance pay. He commenced a new job on 22 April 2025. Twelve weeks exceeds the period for which he was out of work. The practical purpose of severance pay is to provide workers who have been made redundant with financial means during the period in which they are seeking new employment. This purpose has been served in the present case. The severance payment is another reason to conclude that the dismissal was not unfair. If on the other hand the dismissal had been determined to be unfair, the Commission would have been required to assess compensation in accordance with s 392(2) of the Act. Inherent in the concept of 'compensation' in s 392 is the notion of making good an economic loss. It does not appear to me that there was any loss in this case because the severance pay covered the period when Mr Byron was out of work.

• [16] Mr Byron's dismissal was a case of genuine redundancy. It was therefore not unfair. The application is dismissed.

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