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Failure to consider JobKeeper gives rise to Unfair Dismissal
In the recent Fair Work Commission (the “FWC”) decision of Mathew Browne v MySharedServices  FWC 4445, a failure to consider JobKeeper was a relevant factor in finding that a retrenched employee had been “unfairly dismissed”.
MySharedServices (“MSS”) made the decision to terminate the employment of Mr Browne by reason of redundancy on 7 April 2020 after being heavily affected by the COVID-19 shut-downs. Mr Browne was notified of that decision on 8 April 2020 and his employment was terminated with immediate effect. This occurred without consultation as required by the Clerks – Private Award 2010.
At the time of the dismissal, the JobKeeper subsidy had only recently been announced by the Federal Government on 30 March 2020.
Mr Browne subsequently filed an application for unfair dismissal.
The FWC first considered whether the matter was a “genuine redundancy” pursuant to section 389 of the Fair Work Act 2009 (Cth) (the “FW Act”). While the FWC did find that MSS no longer required the role to be performed by anyone because of changes in the operational requirements of the business, it found that the termination of employment was not a “genuine redundancy” as MSS had failed to consult in accordance with the Award. The FWC rejected the argument that consultation obligations had “surely” changed by reason of COVID-19.
The FWC stated that it could not be known what may have come out of a proper consultation of all affected employees, noting that a proposal to reduce hours or an offer to take leave without pay pending clarity on JobKeeper eligibility may have been put forward as a means of securing Mr Browne’s employment. By reason of the failure to consult, the dismissal was found not to be a “genuine redundancy”. As a consequence, the FWC turned its mind to whether Mr Browne had been “unfairly dismissed” in accordance with section 385 of the FW Act.
In its assessment of other relevant matters pursuant to s 387(h) of the FW Act, the FWC considered the JobKeeper subsidy, the failure to consult and subsequent recruitment by MSS.
In respect of the JobKeeper subsidy, the FWC noted that the purpose of JobKeeper was to ensure employees and their employer maintained a relationship, to minimise job loss and minimise redundancies. While the FWC acknowledged that MSS may not have understood the operation of JobKeeper at the time of dismissal, it noted that the same applied to many other employers who managed to maintain employees until such time as the JobKeeper payment came through.
While the FWC acknowledged that the circumstances looked “bleak” for MSS at the end of March 2020, the FWC found that the decision of MSS to employ 2 further sales consultants in May 2020 indicated that there may well have been opportunities for Mr Browne to be redeployed. The FWC further considered the failure of MSS to consult with Mr Browne as noted above.
In consideration of the above, the FWC concluded that the dismissal was harsh and unjust and that Mr Browne had been unfairly dismissed.
• It is important that employers are aware and comply with “consultation obligations” arising under a Modern Award or Enterprise Agreement to minimise the risk of a successful unfair dismissal claim following the dismissal of an employee by reason of redundancy.
• Employers should be mindful that a failure to consider JobKeeper may be a relevant factor in determining whether a dismissal is unfair. This is particularly so in the case of dismissals found not to be “genuine redundancies” pursuant to s 389 of the Fair Work Act 2009 (Cth).
A copy of the decision is available here.