Failure to consult “accentuated” unfairness of redundancy during parental leave

A small business employer failed to “adhere to basic standards of decency” when it notified an administration employee of the redundancy of her role, by email, whilst she was absent on parental leave, though her compensation was kept to a minimum due to the genuine and significant scaling-back of the employer’s enterprise.

The Victorian employer had taken the decision to make the administration role redundant over the course of 2024 as he progressively downsized his operation and moved the business from a leased premises into his garage to make cost savings. The administration officer commenced parental leave in October 2023, and initially, the employer’s wife had performed the administration duties in her absence. When his wife commenced other employment, the owner himself absorbed the tasks that remained once he had outsourced reception functions to an answering service. Although an exact date could not be established, the owner had concluded by “mid-October 2024” that he no longer required the administration role, a timeline which coincided with the administration officer being absent on parental leave for 12 months. The employer did not reach out to the administration officer to communicate his decision to make her role redundant, with the owner assuming the employee had likely decided not to return to work following her parental leave.

Unbeknownst to the employer, on or around 1 October, the employee had posted a letter seeking an extension of her parental leave for a further period of 12 months (beyond 23 October 2024), which the employer claimed not to have received until 20 November. At that time the employer emailed the employee acknowledging her extension request and advising he would notify her within 21 days whether it was approved or not. The employer eventually sent correspondence, by email, on 9 December advising the extension was not approved, prompting the employee to respond on 11 December asking “for what reason” her extension was denied and querying why she had stopped receiving pay slips. The employer replied the same day, explaining that the extension was refused because the business had downsized and the administration role was now redundant. The employer concluded the correspondence by saying, “I agree that communication back to you could have been better, likewise you could have contacted us at any time to indicate your intentions prior to your leave expiring.”

There had been no subsequent contact between the business and the employee since the correspondence of 11 December and evidence established only two instances of phone discussions occurring between the owner’s wife (or his answering service) and the employee during her parental leave absence.

Whilst it was evident the business had legitimately scaled back to being a “business of two” by December 2024, becoming a “business of one” (sole trader) by January 2025, and that it had faced “financial challenges” which “got more difficult during 2024”, the employer’s failure to consult with the administration officer prior to belatedly informing her of the redundancy of her role rendered the termination unfair.

Commissioner Redford of the Fair Work Commission observed that, not only had the employer failed to consult as required by the Clerks – Private Sector Award 2020 prior to making her administration role redundant, he “accentuated” the “unfairness” of the dismissal with his “failure to pick up the phone, when he was becoming aware he could not continue with an office administrator role, and explain the situation to his employee, who was absent on parental leave, and had no way of knowing what was going on”. The Commissioner added, “I do not consider the size of the business, or the absence of human resources expertise excuses it”.

Turning to consider compensation, Commissioner Redford awarded the administration officer two weeks’ wages – less than $2000, plus superannuation – equivalent to the notice period the employee should have received had she been appropriately consulted, before her employment was terminated due to her role being made redundant. Commissioner Redford was not required to factor into consideration any amounts the employee would have received had she not been dismissed, because he conceded her employment would have always ended by way of redundancy in late-2024, even if she had been properly consulted first.

Stien v Hire A Hubby Pakenham [2025] FWC 510 (26 February 2025)