Fair Employment Seperation

Made redundant or fired?

When contemplating firing an employee, proper process must be followed otherwise there is the real risk of the employer facing an unfair dismissal claim.

To avoid the risk, some employers use ‘redundancy’ as an alternative to firing. It’s quicker, sounds nicer and is less painful to all concerned but often has a very poor outcome as happened in a recent Federal Court case.

The employer had sought to argue to the court that their principal motivation for making the employee redundant was financial, in that the Division in which the employee worked was running at a loss. It was claimed that they needed to make the employee redundant to cut costs.

Previously, the employee had had an ‘impressive’ career, but there had been some tension between the employee and their supervisor. A number of written complaints, including two accusations of bullying, had been made by the employee about the supervisor’s management practices.

Unfortunately for the employer, there was some evidence of animosity and information was found on the supervisor’s computer confirming that he had already begun making preparations for the redundancy of the employee.

The Federal Court found the employer had breached the Fair Work Act, fined them $37,000 and ordered them to reinstate the employee. The Court’s conclusion was the employee had unfairly been made redundant…”at least partly because they had been prepared to exercise their workplace rights by making complaints about the behaviour of their immediate supervisor”.

In a final observation, the Court warned the employer that the employee could have been entitled to compensation of up to almost $2million if she wasn’t reinstated.