A recent case heard by the Fair Work Commission highlights clearly the importance of The Fair Work Commission (FWC) recently heard a case that highlights why employers must communicate clearly. Understanding the difference between genuine redundancy vs unfair dismissal is crucial for both employers and employees. Following workplace guidelines to the letter is essential for every business. Confrontation is often difficult. Many leaders prefer “keeping the peace” over addressing troubling behavior. However, avoiding honesty with staff carries high risks. A recent FWC ruling proved this by awarding an employee an $18,000 unfair dismissal payout.
The Case Study: Bluestar Security Services
The case involved Bluestar Security Services, a Victorian firm. In 2018, the director hired a new NSW State Manager. The director soon felt the employee was not meeting KPIs or sales growth targets. By late 2019, the director decided to restructure the business. He removed all state manager roles and retrenched the NSW manager.
The next day, Bluestar hired a National Business Development Manager. They moved from state-based models to a national one. However, the director’s primary motivation was the employee’s poor performance. This fact became the core of the legal dispute regarding genuine redundancy vs unfair dismissal.
Understanding Genuine Redundancy vs Unfair Dismissal
The FWC first asked if the redundancy was genuine or if the company simply wanted to remove an underperformer. In an unfair dismissal claim, both parties present evidence. The Bluestar director admitted he felt he wasn’t getting a “return on investment.” He also noted that communication had reached a breaking point.
The FWC ruled that the restructure was a real business decision. However, the reason for applying it to this specific employee was dissatisfaction with performance. Therefore, the redundancy was not genuine. To stay compliant, you must understand the line between genuine redundancy vs unfair dismissal.
What is a Non-Genuine Redundancy?
The Fair Work Act says a redundancy is non-genuine if the employer:
- Still needs someone to do the employee’s job.
- Fails to consult with employees as required by an award or agreement.
- Could have reasonably offered the employee another role within the business.
Bluestar had a new national role available. The employee had the skills for it, but the director never offered it to him. This oversight transformed a restructure into an unfair dismissal.
Handling Underperformance Correctly
Employers should handle underperformance quickly and appropriately. Often, employees do not realize they are failing. They cannot change without clear intervention. You can learn more about addressing performance issues here.
Ultimately, the employer must fix performance issues before communication fails. If you do not, your business may face the same liabilities as Bluestar. Navigating the complexities of genuine redundancy vs unfair dismissal requires a proactive approach to staff management.
The Verdict
The Fair Work Commission found no evidence that the manager’s performance justified immediate dismissal. The company never told him his job was in jeopardy. He received no formal warnings or a chance to respond. Consequently, the FWC found the dismissal unreasonable and awarded the complainant $18,000.
The Takeaway
Restructuring to avoid a performance conversation is a dangerous shortcut. It opens your business to costly legal claims. If you struggle to communicate with a staff member, seek expert help. Assurance HR can step in to manage these issues before they escalate. Don’t risk a claim—ensure you know the difference between genuine redundancy vs unfair dismissal today.
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If you have a staff member whose performance is unsatisfactory or you’re struggling to communicate with, it can be wise to employ a third party to address the issues before things go too far. Assurance HR are available to step in for cases such as this. If you need help addressing an underperformance issue, or have any other concerns raised by this article, give Assurance HR a call today, on 1800 577 515.
