Marriage Breakdown Real Reason for Dismissal, Not Redundancy: FWC

A worker sacked by her estranged husband from the business they co-founded was unfairly dismissed, the Fair Work Commission (FWC) has found.

In the FWC

The applicant in the matter was employed as Marketing Director by the business which develops and sells products such as phone cases and smart locks.  She told the FWC she co-founded the company with her husband and began working as an employee of the business in January 2012.  The applicant’s husband was the CEO (and director).  In November 2020, the couple separated.  The applicant was dismissed in March 2021. 

Before the FWC, the business argued the dismissal was a case of genuine redundancy.  Documents were tendered in the FWC showing the business had incurred significant losses since it began trading.  The company argued that since the COVID-19 pandemic began, huge cutbacks were needed on all fronts because of cashflow issues.  Staff were let go or converted to part-time as the company could not afford to keep on any full-time employees.  A decision was made by the CEO that a marketing employee was not affordable or required as no new product launches or press releases were planned.

The applicant told the FWC that in addition to marketing duties, she had performed everything from product testing to customer service, sales and packing orders.  The applicant said that her estranged husband had barely worked in the business or showed any concern about its financial status before her dismissal and spent time excessively playing on his X Box during work hours.  The applicant also told the FWC that her estranged husband informed her that the reason for the dismissal was due to their personal situation and that he did not wish to work with her any longer.

Outcome

Deputy President Asbury of the FWC was left unconvinced by the company’s argument.  The Deputy President found that the downturn brought about by the pandemic was a “convenient basis” for the company to dismiss the applicant, when “in truth,” had the applicant and the CEO been happily married, the applicant would have remained in the company’s employment.  The Deputy President considered the applicant would probably have continued in a part-time role on a lesser income, while efforts were made to turn the business around.  The Deputy President said:

…I am of the view that when the evidence is considered in its totality, it is more probable than not that the fact that the Applicant was the estranged spouse of the CEO Mr Ranchod at the relevant time, played a role in her dismissal. Mr Ranchod’s attempts to rationalise the Applicant’s dismissal on the grounds of redundancy were entirely unconvincing…

The Deputy President found the dismissal was not a case of genuine redundancy.  There was no valid reason for the dismissal, and there were other facts that made it unfair.  The applicant was not consulted about the purported redundancy and was locked out of the business for several months before the dismissal.  The fact that the advice that her role was to be made redundant was conveyed to her by letter was described by Deputy President Asbury as “completely inappropriate” given her contributions to the business over the years.

The applicant was awarded compensation for her unfair dismissal amounting to $27,068.65 less tax and superannuation contributions of $2,571.50.

Ranchod v Dog and Bone Holdings Pty Ltd T/A Dog & Bone [2021] FWC 6093