The Impact of COVID-19 On Unfair Dismissal & Redundancy

The impact of covid 19 on unfair dismissal redundancy - Arrow White

The Effect of COVID-19 on Dismissal & Redundancy

The COVID-19 pandemic has undoubtedly had a negative impact on many businesses financially, even forcing some to close. Employees of these businesses are not immune to the impacts and are now facing the negative flow-on effects, which may include reduced working hours, or being dismissed from work. This has created a large spike in claims of unfair dismissal against employers.

What Are Your Rights?

Dismissal of an employee occurs when they have been forced to resign or their employment has been terminated. However, if the reason for an employee’s dismissal is not valid, it may be determined as an unfair dismissal. Unfair dismissal can occur if a dismissal is:

Harsh, unjust or unreasonable; Not a case of genuine redundancy; or Without a valid reason.
The Fair Work Commission (FWC) has a large discretionary power when deciding what is determined as harsh, unjust or unreasonable and will take into account all the factors surrounding the dismissal.

What is a Valid Reason for Redundancy or Dismissal?

To the benefit of employees, the previously accepted standard for genuine redundancy has been altered by the COVID-19 pandemic, creating a new aspect that must be considered when determining if the dismissal was for a “valid reason”.

An example of this is the recent decision of AllPet Products, which further cemented the FWC’s position on how they must factor the COVID-19 pandemic into a decision of unfair dismissal. In this case, the employee showed a downfall in sales over a period of more than 6 months and failed to meet the targets that had been set, and as a result, was issued with a formal warning.. However, the ensuing pandemic resulted in a pay reduction that made it even harder for the employee to reach the goals that had been set, which put even more pressure on their duties. This later lead to their termination for “lack in performance”.

It was decided by the FWC that the employer failed to reasonably consider the effects of the pandemic and therefore the termination based on performance was not valid. This decision enforced the notion that expectations for an employee to complete tasks of the same size or more, in less time and/or for reduced pay due to the pandemic, can weigh heavily in the favor of an unfair performance-based dismissal. The only valid reason for dismissal due to COVID-19 alone would be in the case of genuine redundancy.

What is a Case of Genuine Redundancy?

Cases of redundancy are ever more prevalent in the current times; however, it is important to identify what constitutes genuine redundancy. When being made redundant, it is not possible for the sole reason to be due to the pandemic. There is a need for further elaboration by the employer on how their business has been impacted and the reason they can no longer offer you the position, is because the job  is no longer necessary. There are also further consultation requirements as per your specific award, enterprise agreement or other registered agreement that must be followed. Furthermore, for a case of genuine redundancy,  the employer’s ability to offer you another job within the business should be considered.

How Can We Help You?

If you believe that you have been unfairly dismissed, it is important to act swiftly. This is because if there is genuine case of unfair dismissal, the application to the FWC against the employer needs to be completed within 21 days of the dismissal occurring.

However, if the deadline to have the matter dealt with by the FWC has passed, other avenues may be available to you.
If you are successful in a claim of unfair dismissal, there are multiple remedies available which can range from reinstatement of your former position or compensation.

Please contact our office on 1300 277 699 for a free initial consultation today.

IMPORTANT: This is not advice. Readers should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice is sought before acting in any of the areas covered in any newsletter.

This webpage is made available by Arrow White for educational purposes only as well as to give you general information and a general understanding of the law, but not to provide specific legal, tax, financial or investment advice. By using this webpage, you understand that there is no lawyer-client relationship between you and Arrow White. The webpage should not be used as a substitute for competent professional advice from a suitably qualified professional. Nothing on this webpage should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by Arrow White or any third party. You alone are solely responsible for determining whether any investment, asset or strategy or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult a suitably qualified professional regarding your specific legal, tax, financial or investment situation.

[1] See, eg, Fair Work Commission, ‘President’s Statement: The Fair Work Commission’s Coronavirus (COVID-19) Response’ 


[3] [2020] FWC 5332

Disclaimer: This publication is intended for general and informative use only and is not to be relied upon as professional financial or legal advice.

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