Failure to consult costs COVID-impacted employer $1K, again

In October, we reported on the limited compensation awarded to a vehicle leasing consultant who was made redundant within days of the announcement of the JobKeeper scheme, causing him to lose out on potentially thousands of dollars in wage subsidy payments (see our related article). The Fair Work Commission has now been called upon to examine the termination of one of his co-workers, which was also occasioned in April by way of redundancy owing to the COVID-19 pandemic, and having found the dismissal to be unfair, has, for the second time in a matter of months, ordered the employer to observe a week’s wages in compensation.  

Earlier in November, Deputy President Gostencnik determined the termination of the Sales Support Consultant to be unfair on the basis that the employer had failed to follow the requisite consultation process provided for within the Clerks – Private Sector Award 2020 before making the Consultant’s position redundant on 9 April 2020.  

Having determined reinstatement to be an inappropriate remedy, the Deputy President turned to consideration of appropriate compensation. The Consultant argued that, had she been properly consulted with in April, she would have sought a period of unpaid leave in the hope she would have been able to return to her full-time hours by May. The Consultant advanced that her performance had never been in question and, had she been retained in employment through April, albeit on unpaid leave, she envisaged she would have remained employed for a period of 18 weeks and sought that equivalent compensation be awarded.

Applying similar reasoning to that exercised by Commissioner Bissett in October, Deputy President Gostencnik instead concluded that there could be no certainty the employer would have agreed to the Consultant’s request to take unpaid leave in April, given the employer’s need to act “reasonably quickly to address its cost base” at the time. Ultimately, the Deputy President determined the likelihood that the employer would have elected to carry the Consultant, and/or several other employees, in employment through April would have been “remote”. The Deputy President observed:

“The [Consultant’s] reliance on the fact that there was some improvement in the business of the [employer] in May 2020 ignores the fact that at the time that consultation would have occurred in early April, this could not have been known. It also ignores the fact that the [employer] was restructuring in response to economic conditions. It cannot be criticised for wanting to streamline its operations and effect operational efficiencies for the long term. Moreover, though it became eligible for JobKeeper a short time after dismissal of the [Consultant], as already noted the [employer] was not obliged to keep all of its staff or prohibited from effecting redundancies to achieve efficiencies and a reduced cost base.”

Having assessed that the employer’s only failing was that the business did not observe an appropriate consultation process prior to carrying out the redundancy, the Deputy President surmised the employment would not have continued longer than another week. Notwithstanding the fact the Consultant failed to secure alternative employment until October 2020, Deputy President Gostencnik limited compensation to $1,057.69 (a week’s wages), plus superannuation.

Duckworth v My Shared Services Pty Ltd [2020] FWC 6626(10 December 2020)