Lauren Noordhof v FNW Grafton Pty Ltd

[2025] FWC 429

[2025] FWC 429

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Lauren Noordhof
v

FNW Grafton Pty Ltd

(U2024/13916)

COMMISSIONER MCKINNON SYDNEY, 14 FEBRUARY 2025

Application for an unfair dismissal remedy – whether dismissal consistent with Small Business Fair Dismissal Code – whether genuine redundancy – whether harsh, unjust or unreasonable

1. Ms Lauren Noordhof was employed by FNW Grafton Pty Ltd (FNW) in the Sales Office from 27 May 2021 until 1 November 2024 when she was dismissed on redundancy grounds. Ms Noordhof was paid in lieu of notice up to and including 12 November 2024.

1. On 20 November 2024, Ms Noordhof applied in time to the Commission for a remedy for unfair dismissal under section 394 of the Fair Work Act 2009 (the Act). Ms Noordhof is protected from unfair dismissal because she has been dismissed; had completed at least 12 months’ continuous service at the time of dismissal; was covered by the Clerks – Private Sector Award 2020; and her annual earnings of $50,960 were below the high-income threshold.

1. Ms Noordhof says the dismissal was unfair because she was not paid redundancy pay. Ms Noordhof also submits that the dismissal was not a ‘genuine redundancy’ within the meaning of the Act because there was no consultation as required under the Clerks – Private Sector Award 2020 (the Award). It appears that Ms Noordhof also relies on consultation obligations in the H.E.M.E. Enterprise Agreement 2016. However, that enterprise agreement was terminated on 10 May 2019 and is no longer in operation.[1]

1. On 4 December 2024, FNW responded to the unfair dismissal application, objecting on the basis that it was a small business employer, and the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). In its response, FNW asserted that it had 4 employees. It did not then, or later, file any evidence or submissions in support of its assertions and objections. The only evidence before the Commission is that filed by Ms Noordhof. I accept her evidence and proceed on the basis that there is no dispute as to the facts relied on by Ms Noordhof.

Was FNW a small business employer, and was the dismissal consistent with the Code?

1. I am not satisfied on the evidence that FNW was a small business employer. FNW appears to have associated entities in Toowoomba, Inverell and Brisbane. According to Ms Noordhof, its head office, human resources and payroll are all run out of Brisbane where its Managing Director, Mr Blake Burgess is based. Purchase orders are sent to Mr Burgess for approval prior to purchasing. The FNW website described the Grafton store as a branch of FNW, which has four stores in two states and more than 60 staff.

1. At the time of her redundancy, Ms Noordhof submits that the total employee count of FNW was as follows: Toowoomba - 29 staff; Inverell - 12 staff; Grafton - 4 staff; and Brisbane - 49 staff (including Mr Burgess). ASIC records show that each FNW entity has the same director and place of business.

1. As I am not satisfied that FNW was a small business employer at the relevant time, I am unable to conclude that the dismissal was consistent with the Code. But even if FNW was a small business employer, its objection to the application on this basis would necessarily fail because the Code does not apply to termination of employment by reason of redundancy.

Was the dismissal a genuine redundancy?

1. Section 389 of the Act provides the meaning of ‘genuine redundancy’. A person’s dismissal will be a case of genuine redundancy if:

2. Their employer no longer required their job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

3. The employer complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

1. Clause 38 of the Award applied to Ms Noordhof’s employment. Under clause 38, employers must consult with their employees as soon as practicable after a definite decision has been made to make major changes in the workplace that are likely to have significant effects on employees, including termination of employment. The employer must give notice of the changes to all employees who may be affected and commence discussions on the matter with them. Discussions must at least cover the introduction of the changes, their likely effect on employees and measures to avoid or reduce the adverse effects of the changes on employees.

1. Clause 38 applied in relation to the redundancy of Ms Noordhof because FNW made a decision to close its Grafton branch, affecting all of its employees with the loss of their jobs.

1. There is no evidence of any notification or consultation with employees before they were given notice of termination by email on 22 October 2024. Ms Noordhof was alerted to the email in a phone call from human resources at the time, when told by someone in human resources to “check her personal emails” and who also said she was “sorry she was told not to say anything but knew it wasn’t being done right”. It then fell upon Ms Noordhof to communicate the decision to other employees in the Grafton branch.

1. After finishing work on 22 October 2024, Ms Noordhof received a phone call from the store manager, Mr Greg Burgess. He offered to sell her the store, but she did not have the money. Ms Noordhof asked instead to take over the store and keep it open for 6 months to give her the opportunity to turn it around. The proposal was not agreed.

1. On the materials, I find that by failing to notify and consult with employees prior to communicating the fact of their dismissal, FNW did not meet its consultation obligations under the Award, including in relation to the redundancy of Ms Noordhof. The dismissal was not a genuine redundancy.

Was the dismissal harsh, unjust or unreasonable?

1. Valid reason relating to capacity or conduct; notice; and opportunity to respond: There was a valid reason for the dismissal of Ms Noordhof in that FNW was closing the Grafton store. The reason was notified to Ms Noordhof in advance of it taking effect, with notice of termination given on 22 October 2024 and her last day of work (and effective date of dismissal) being 1 November 2024. The only opportunity to respond to the closure of the store was a brief discussion with Mr Burgess on the day that she was dismissed about potentially taking over the store and trying to turn things around. The reason for dismissal did not relate to Ms Noordhof’s capacity or conduct, and did not effect the safety and welfare of other employees at the Grafton store except to the extent that it meant that each would lose their job.

1. Involvement of support person in discussions: There is no evidence of any unreasonable refusal by FNW to allow a support person to be present to assist at any discussions relating to the dismissal of Ms Noordhof.

1. Warnings for unsatisfactory performance: Ms Noordhof was not dismissed in connection with unsatisfactory performance.

1. Size of the business and absence of dedicated human resources expertise: In the absence of objective evidence to confirm the overall size of the business at the time of dismissal, it is not possible to assess these matters properly including how they might have affected the procedures followed by FNW in giving effect to the dismissal. There is no evidence about when the decision to close the store was made. There was at least one person employed in human resources who called Ms Noordhof to tell her to check her emails, and another employed in accounts and payroll to whom she later addressed queries about her pay. The business closure was communicated to Ms Noordhof suddenly and with limited information about the reasons for closure, any market transition plan or options to mitigate the effects of the decision on employees. Whether it was due to the size of the business, or lack of specialist expertise, or simply lack of care, the process adopted to give effect to the redundancy was not a good one.

1. Personal consequences: Ms Noordhof experienced significant emotional toil and distress after notice of her dismissal was given. She was left with one other co-worker to run the store, make all the decisions and deal with the anger and abuse from customers being told their orders were cancelled but not being able to explain why. There was no time for Ms Noordhof to look for a new job or attend interviews. She worked from open to close every working day during the notice period, ending up on the phone to human resources on numerous occasions in tears. She had to deal with an unusual WorkSafe self-report relating to a picnic table being placed on the roof of the store. She was unusually emotional and tearful, unable to sleep at night and thus tired, fatigued and on edge. Ms Noordhof believes this was indicative of a period of depression and anxiety, although there is no evidence of any formal medical diagnosis in this regard.

1. Transfer of employment to Western Pacific Steel Pty Ltd: FNW’s response to the application stated that it sold the Grafton business to Western Pacific Steel Pty Ltd (WPS) and that it was pivotal in Ms Noordhof having continuing employment with WPS. Ms Noordhof denied this in her evidence and was not contradicted. I accept the evidence and submissions of Ms Noordhof.

1. Underpayment of wages: Ms Noordhof claims an entitlement to 7 weeks’ redundancy pay following the termination of her employment by reason of redundancy. She also asserts underpayment of wages in relation to first aid allowance. Whether the entitlement to redundancy pay crystallised on termination depends on whether FNW was in fact a small business employer, as well as on the circumstances of any transfer of employment to WPS. I am not satisfied on the evidence that FNW was a small business employer but nor am I in a position to find that it was not. In any event, payment of entitlements is a matter that falls outside the jurisdiction of the Commission. Ms Noordhof can seek the payment of her entitlements through the Fair Work Ombudsman or through the courts.

Ms Noordhof was unfairly dismissed

1. The business closure was a valid reason for dismissal, unrelated to Ms Noordhof’s capacity or conduct. The lack of consultation about the business closure and its consequences for Ms Noordhof’s employment occurred in disregard of FNW’s Award obligations. It led to a process that denied Ms Noordhof natural justice. Earlier advice about the decision to close and better sharing of information would likely have avoided the adverse effects of dismissal on Ms Noordhof. Instead, she experienced personal distress and overload in the period after notice was given because of the extra work involved in closing down the store and the lack of support received during the notice period. The other relevant matters carry limited weight in this case due to the lack of evidence to support them, and in relation to the claim for redundancy pay, because there is an alternative avenue to pursue the matter.

1. On balance, I am satisfied that the unexplained procedural deficiencies rendered the dismissal unjust. Ms Noordhof has been unfairly dismissed.

Remedy

1. Reinstatement is not sought by Ms Noordhof. It is also not an outcome that is possible to achieve due to the Grafton store closure. Accordingly, Reinstatement would not be an appropriate remedy. I am satisfied that compensation is the appropriate remedy.

1. Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is elaborated on in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden).[2] The methodology is of limited relevance in the circumstances of this case because there is no reason to consider that the outcome of termination might have been different had a fair process been adopted in carrying out the dismissal. It remains necessary however to consider each of the matters set out in s.392.

1. Viability (s.392(2)(a)): There is no evidence to the effect that an order requiring FNW to pay compensation to Ms Noordhof would affect the viability of its enterprise. Despite the closure of the Grafton store, FNW appears to have a head office and related entities that continue to trade.

1. Length of service (s.392(2)(b)): Ms Noordhof’s length of service of almost 3.5 years in a relatively small store (including approximately 2 years as a permanent employee) warranted more care in the communication of her dismissal.

1. Remuneration Ms Noordhof would have received, or would have been likely to receive, if she had not been dismissed (s.392(2)(c)): I am not satisfied that Ms Noordhof would have remained in employment with FNW for any longer than she did. As noted above, there is no contest about the actual decision to close the Grafton store although the reasons for the decision remain unexplained. There is no evidence about the availability or even consideration of any alternative roles into which Ms Noordhof might have been redeployed.

1. Mitigation efforts (s.392(2)(d)): There is a vague reference in Ms Noordhof’s materials to the fact that WPS is her new employer. I have accepted her denial that FNW obtained this employment for her – with its implication that Ms Noordhof did in fact become employed by WPS after her dismissal by FNW. When that occurred is not apparent. Mitigation efforts do not affect the assessment of compensation in this case.

1. Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f)) since dismissal: Ms Noordhof was paid in lieu of notice of termination up to 12 November 2024. It seems likely that she has since earned at least some income as an employee of WPS but as noted above, the facts in relation to her employment with WPS are not established.

1. Other matters (s.392(2)(g)): No adjustment for contingencies is warranted.

1. Misconduct (s.392(3)): The dismissal was not for any conduct-related reason.

1. Shock, Distress (s.392(4)): The amount of compensation does not include a component for shock, humiliation or distress.

1. Compensation cap (s.392(5)&(6)): When each of the matters above are weighed together, the established methodology leads to a nil compensation amount. Plainly, that is below the compensation cap of 26 weeks’ pay.

1. Instalments (s.393): FNW made no application to pay any compensation awarded by instalments and no order will be made to that effect.

Conclusion on remedy

1. In my view, a nil compensation amount is clearly inadequate in the circumstances of the case. An amount equivalent to 2 weeks’ pay is appropriate to compensate for the unjust nature of the dismissal as described above. Ms Noordhof’s weekly pay was $980.00 gross. Accordingly, I will order payment of compensation to Ms Noordhof in the gross amount of $1960.00. This is separate to any entitlement that Ms Noordhof may have to redundancy pay in connection with her employment with FNW, which can be separately pursued through the Fair Work Ombudsman or the courts.

1. Order PR784331 will issue separately giving effect to this decision.

COMMISSIONER

Determined on the papers.

[1] H.E.M.E Enterprise Agreement 2016 [2019] FWCA 3244 (10 May 2019).

[2] [2013] FWCFB 431.

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