The Fair Work Commission has ruled that an employee who accused his boss of funnelling $9,000 of company money to fuel an ice addiction was not unfairly dismissed.

It’s an interesting case study for any in HR who handle redundancies. Following almost ten years’ service with electrical contractor Westelect Services, Perth based HR manager Mr Bizzaca was told his position was being made redundant. He made an application to the Fair Work Commission, claiming it was a sham but the Fair Work Commission have held that it’s genuine.

Bizzaca worked various roles during his tenure, retraining as an HR/OHS manager in 2017. The company had been standing on financially rocky ground for some time and in November last year, they were forced to start letting go of staff.

Concerned he too would be on the chopping block, Bizzaca approached his managing director with his concerns. His fears were alleviated when his boss assured Bizzaca he would be “the last to go.”

A change of tune

According to Bizzaca, he approached his managing director again after noticing his “erratic” behaviour and raised concerns that $9,000 had been withdrawn from the company’s account, speculating that the managing director had been using this money to fund a methamphetamine addiction. The managing director denied the accusations.

Following this, Bizzaca confided in the company’s operations director, who apparently had a toxic relationship with the managing director. The two of them decided try and buy out the business together.

But, before he had the opportunity to advance the deal, Bizzaca was told that his position was being made redundant, less than three months after the conversation with his boss about the missing money.

The conversation, which was recorded, was very casual in nature and seemingly unprofessional:

MD: “I think you know what’s coming up.”

HR manager: “Of course I do.”

MD: “Even if I was going and [the operations director] was staying… that position that you are holding anyway was, um, not gunna be valid for the size of the business and all that sort of stuff mate.”

HR manager: “Yep.”

MD: “So, it’s nothing personal, it’s purely for the business and, um, yeah. Any questions [or] anything you wanna. . .”

HR manager: “What have you actually told me?”

MD: “Um, well you’ve been… your position [is being] made redundant.”

HR manager: “Right.”

MD: “Um yep, as of today. . .Yeah so if you wanna just get your sh*t and. . . get one of the boys to give you a lift home mate.”

His redundancy was genuine

Bizzaca believed his redundancy was “a sham… motivated not by genuine operational reasons but rather by the souring of the relationship between him and [the managing director] in February 2018 and the failed buyout of shares”.

As HRM reported earlier in the week, it’s imperative for employers to understand the ingredients that make up a genuine redundancy in order to avoid unfair dismissal claims.

All redundancies must comply with the “genuine redundancy” terms under section 389 of the Fair Work Act 2009. According to Kylie Groves, partner at Hall & Wilcox, the essential ingredients for a genuine redundancy are:

• no longer requiring the job the person has been doing to be performed by anyone due to operational changes;
• complying with any consultation obligations; and
• making reasonable attempts to redeploy redundant employees.

Deputy president Abbey Beaumont found that Bizzaca’s redundancy was genuine, stating that she believed Westelect no longer required an HR/OHS manager due to operational changes.

Bizzaca argued that he was not consulted in accordance with the process in Westelect’s agreement but Beaumont highlighted that his new role wasn’t covered under that.

Why not redeploy?

Justifying the “genuine nature” of Bizzaca’s redundancy, Beaumont said that three other Westelect employees had been made redundant within a seven month timeframe and there was sufficient evidence to show that the business was not in a good financial position; they had accumulated nearly $900,000 in debt, and were running at a loss, which made reployment or retraining opportunities for redundant staff difficult.

“I remain firm in my view that it would not have been reasonable for a small business employer in the circumstances such as those described to have had to redeploy [Bizzaca]”, says Beaumont.

“The business was focused on cutting corporate overheads, making payments to the ATO regarding its tax liability and ensuring that employees engaged in the business generated revenue.

“The evidence showed that the operational requirements of the business had. . . changed and in light of this it would not have been reasonable in all the circumstances for [Bizzaca] to have been redeployed given the absence of a suitable position for which he possessed the skills and competence.”