The chief executive of food manufacturer Byron Bay Superfoods says the company is considering appealing a decision from the Fair Work Commission ordering it to pay $10,000 in compensation to a South Sudanese refugee who won an unfair dismissal case against the company.
In May, Fair Work Commission vice president Adam Hatcher decided the company had unfairly and harshly dismissed one of its factory workers, who claimed was made redundant after putting forward a case to be paid unpaid overtime and correct entitlements under the industry award.
However, Byron Bay Superfoods chief executive Paul Owie says the case shows there are “issues with the Fair Work Commission and the ability of small business to make people redundant if there is a downturn”.
The employee, who arrived in Australia from South Sudan as a refugee in 2005, commenced work with Byron Bay Superfoods in 2014. The company makes snack foods, including Wallaby Bites and Superfoodie breakfast slices.
The worker claimed he was required to work unpaid overtime and was asked to take annual leave days when his manager directed him to take time off to account for periods of low activity in the business. He also claimed his direct manager spoke to him in a “nasty way”, and referred to black people as “coloured people”.
The employee claims that after making a request to be paid his full entitlements according to the Food, Beverage and Tobacco Manufacturing Award, he was offered a $1000 annual increase in wages, which he refused. He alleged the company then informed him his position was being made redundant and asked him to leave the business in August 2016.
However, Byron Bay Superfoods told the Fair Work Commission it had offered the wage increase as an incentive for retraining, due to the fact that new machinery was to be required in the area the worker was employed in.
The company claimed the worker had refused to be retrained, but on evidence given to the Commission, vice president Hatcher found there was no reason why the worker couldn’t have been retrained, and the employee insisted he was open to further training.
The dismissal was found to be unfair, with the Commission deciding the case was not one of genuine redundancy and even if it had been, proper consultation processes were not followed.
In a decision on penalties handed down on Friday, vice president Hatcher ordered Byron Bay Superfoods to pay the worker $10,694 in four instalments by the end of September 2017.
Paul Owie tells SmartCompany the business refutes suggestions made in the case that there was an element of bullying or racial vilification involved in the situation, with the Commission finding it was not possible to make a call on the veracity of claim made about the employee’s manager, and it was not necessary to do so in order to decide if the redundancy was genuine.
“It has nothing to do with the case, and we didn’t see that coming,” Owie says of the claims.
Owie says the business is considering appealing the compensation order, but says that process will be “very, very costly”.
While Byron Bay Superfoods disagrees with the Commission’s ruling that the case was not one of a genuine redundancy, Owie says the experience means in future the business will be much more careful to explain situations directly to employees.
“We probably could have given him more information — we gave a fair bit but we didn’t put it in writing,” Owie says.
SmartCompany was unable to contact the former employee for comment this morning.
Managing director at Workplace Law Athena Koelmeyer tells SmartCompany the case is a reminder to SMEs that criteria for genuine redundancies are clearly set out in awards, and if a business owner wants to make a worker redundant, you only have “one shot at getting it right”.
“I think it’s really important for small businesses that the definition of a ‘genuine redundancy’ is very tightly defined by the Commission, and it sets out very clearly when you can do it,” Koelmeyer says.
In his decision on this case, vice president Hatcher said that small businesses still need to abide by consultation requirements for genuine redundancies, including notifying employees of potential significant changes to their working arrangements and having a discussion about these changes.
Koelmeyer says SMEs need to make sure they consider the full range of deployment options for staff before a final call is made on a redundancy.
“[Consider] if there are redeployment opportunities … not just within the location or site — it also applies to redeployment opportunities within a group of companies, if there are several,” she says.
Koelmeyer says the Fair Work Commission has made its position clear in this area, and that unless a company can demonstrate through written records that a job is genuinely no longer required in a business, and there has been consultation with staff about this, it will make it very difficult if the business has to answer to the Commission down the line.
“If you don’t meet those things, [the Commission] will say, it’s really not a genuine redundancy,” Koelmeyer says.
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