UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2025 WAIRC 00805

DELIVERED : thursday, 25 September 2025

FILE NO. : U 51 OF 2024

Applicant

AND

Jacquelyn Danao

Respondent

CatchWords : Industrial Law W.A. - Termination of employment - Unfair dismissal - Genuine redundancy - Whether applicant's position was a genuine redundancy - Genuine redundancy found - Whether termination of employment contract was unfair - Termination found to be unfair - Order issued

Legislation : Industrial Relations Act 1979 (WA)

Result : Order Issued

Representation:

Applicant : Ms M Brown (of counsel)

Respondent : Ms J Danao

Case(s) referred to in reasons:

Undercliffe Nursing Home v The Federated Miscellaneous Workers Union of Australia, Hospital Service and Miscellaneous WA Branch (1985) 65 WAIG 385

Amalgamated Metal Workers and Shipwrights Union of Western Australia and the Operative Painters and Decorators Union of Australia, West Australian Branch Union of Workers v Australian Shipbuilding Industry (WA) Pty Ltd (1987) 67 WAIG 733

Garbett v Midland Brick Company Pty Ltd [2003] WASCA 36; (2003) 83 WAIG 893

Termination, Change and Redundancy General Order [2005] WAIRC 01715; (2005) 85 WAIG 1681

Reasons for Decision

1         Ms Kaitlyn Larney (applicant) was employed as a clerk by Ms Jacquelyn Danao (respondent) in her cleaning business, Smurfettes Cleaning Service (Smurfettes), from 29 March 2022.

2         On 12 May 2024, the applicant received an email terminating her employment. She applies to the Western Australian Industrial Relations Commission (Commission) claiming she was unfairly dismissed.

3         The respondent denies the dismissal was harsh, oppressive or unfair, and argues that the dismissal was a genuine redundancy due to the need to cut business costs.

Applicant’s evidence and submissions

4         The applicant commenced working for the respondent in a part-time capacity on 29 March 2022. The applicant lives with disabilities, including visual impairment, and is accompanied by a seeing eye dog, which attended the hearing with her. Prior to her employment with Smurfettes, the applicant was unemployed for seven years, and attributes this to her disabilities. At the hearing, she gave examples of people saying she ‘sounded really great on the phone’ but not employing her once they met her in person (ts 5). She also gave an example of a business saying that dogs would not be acceptable in their workplaces. For this reason, she valued her employment at Smurfettes.

5         The applicant had her contracted hours increased to full time in early February 2023, due to what she understood to be a growth in the business. At that time, she earnt around $1,800 a fortnight after tax. She says there were around 18 employees employed at Smurfettes.

6         Her duties included checking emails, dealing with cleaning cancellations, communicating with clients, making rearrangements for cleaners who were sick and assisting cleaners who may need help. For example, if a cleaner arrived at a home and nobody was there to let them in, the applicant would assist. She said a lot of the cleaning clients were part of the National Disability Insurance Scheme (NDIS) as the company is registered with the NDIS. She would have to assist with arranging cleaning for clients with severe disabilities, veterans and people with very ill children.

7         She would also assist with reaching out to NDIS support coordinators to discuss new documents when contracts were close to expiring. She said there were a lot of texts coming in and out and she tried to improve the efficiency of the business over time.

8         The applicant said that the respondent or another employee, who is the respondent’s son, would sometimes cover for her when she was away. She said that was needed when she had two major surgeries and needed 10 days off each time. The applicant said that in her absence, the essential matters were attended to by the respondent or the respondent’s son. However, non-urgent matters were usually left for her to attend upon her return.

9         In early 2024, the respondent asked the applicant to train another employee, her son, in the tasks undertaken by the applicant.

10      The applicant recalls a conversation with the respondent on 26 April 2024 in which the respondent informed her that the business was in the red and could no longer afford her full-time position. The respondent told the applicant she would continue to be employed on reduced hours:

I got called about an hour before I finished work, um, just, you know, to be told, “look, hey like the business isn’t doing good, you know, we’ve been seeing that. We’ve been seeing that. When you come back you’re going to have to halve your hours.” So I’d be dropping from a 76-hour fortnight to a 40-hour fortnight. Um, not exactly something I could really process too much at the time. Um you know, go pack your bags and leave and get all that stuff together (ts 9).

11      The applicant gave evidence that she agreed to the reduced contracted hours so she could keep her position.

12      On 29 April 2024, the applicant took pre-approved annual leave to travel to Melbourne to train with her new seeing eye dog, as she needed assistance with this. The applicant was due to start work again after her leave on 13 May 2024.

13      On 6 May 2024, the applicant says she noticed the respondent had paid an unusual deposit into her bank account. The applicant says she contacted the respondent and was advised that she had paid out her accrued annual leave because the applicant was going to be working part time.

14      Despite being on annual leave, the applicant was undertaking some tasks concerning Smurfette’s operations until the respondent told her not to, the applicant said in evidence that:

I’d had some time dedicated – an hour a day, just for any of those contracts and bits and bobs that we knew were going to expire….and Konan (the Respondent’s son) didn’t know how to do them. I was told not to teach him how to do it, because it’s not necessary. We’ll just work it out. So I was like, “okay. No worries. Everything was going to be sorted” (ts 9).

15      Despite being told by the respondent not to undertake tasks on leave, the applicant said:

Um he did message me a few times while I was away, and I just had to say, “Sorry I can’t help you.” Um, I couldn’t answer his questions and things, because I was told I would-could- could not work while I was away (ts 10).

16      On Saturday 11 May 2024 at 11.05 am, the applicant received a copy of a new contract from the respondent by email. The contract reduced the hours of work as agreed. The applicant said she noted that the classification of her position was not specified. The applicant also noted that the ‘all-inclusive above award rate of pay’ which the contract annualised in accordance with clause 36 of the Clerks (Commercial, Social and Professional Services) Award No. 14 of 1972 (Award) was specified as $25.44 per hour. In the 2023 version of the Award, which would have applied at the time, the annualised rate of a Grade 3 Clerk in their second year of work amounts to $25.70 per hour. The applicant’s hourly rate of pay up until that point had been $29.89 per hour (exhibit R2).

17      The following day, on Sunday 12 May 2024, the applicant emailed the respondent:

Hi Jackie,

Thank you for the contract sent through on Saturday. I have reviewed it but would like to have it reviewed by an outside source. First chance for this is Monday. It will be late on providing the contract back to you and will need an extension.

Now would you like me to work Monday morning and have it reviewed in the afternoon an get back to you or resume once the contract is sorted? Perhaps Tuesday start instead (exhibit A3).

18      Later that day, at 6.45 pm, the applicant received an email from the respondent:

Dear Kaitlin,

In the best interest for the business right now we will be withdrawing our offer of employment to you.

We appreciate and thank you for all your effort in service with us.

Konan will be in touch to retrieve mobile phone and any properties that belongs to Smurfettes Cleaning Service (exhibit A4).

19      The applicant says the dismissal has had a significant impact on her and she has struggled to find new employment. The applicant submits she has taken on volunteer roles. Further, the applicant says she has had to increase her medication to cope with the emotional stress from the loss of income and that she has complex medical needs which requires ongoing specialised care.

Respondent’s evidence and submissions

20      The respondent in this matter is the owner of Smurfettes and a sole trader. She gave evidence that her business was struggling financially and there was a need to cut costs to remain viable.

21      The respondent agrees that she had a conversation with the applicant on 26 April 2024, in which she explained that the business was facing financial issues and that she needed to have a difficult conversation with the applicant. The respondent says she told the applicant that the business could no longer afford her full-time position. The respondent’s evidence was that she sought to keep the applicant by reducing her working hours to part time.

22      Initially, the respondent’s evidence was that she gave the applicant two weeks’ notice of the decision to reduce costs and abolish her position in the conversation with the applicant on 26 April 2024. The respondent says the notice period ended on 12 May 2024 and the applicant was supposed to recommence work on 13 May 2024. During cross-examination, the respondent admits that she did not specifically say that the position would be abolished and that this was only implied (ts 38). The respondent recalls that she advised the applicant she would try to continue her employment on a part-time basis (ts 32).

23      The respondent says that she did not pay the applicant a severance package because businesses that had under 15 employees are not obliged to pay a severance package. The respondent could not recall whether she conducted a head count of her employees at the time of making the decision to abolish the applicant’s position and make the applicant redundant (ts 40).

24      The respondent admits that she did not notify the applicant of the termination of her employment in writing because she did not have time. Moreover, the respondent admits that she ought to have provided notice in writing (ts 38).

25      The respondent agrees that she sent the applicant an email on 11 May 2024, attaching the part-time contract of employment with reduced hours of work:

Congratulations on successfully obtaining a Part-Time Clerks position with us! Please review your contract and sign electronically within 2 days of receiving your contract. Looking forward to working together. Once again, Welcome to Smurfettes Cleaning Family (exhibit A2)!

26      The respondent agrees that she received an email on 12 May 2024 from the applicant in response to the 11 May 2024 email, requesting an extension of time to sign the contract so that she could have the document reviewed.

27      The respondent agrees she sent a message to the applicant on 12 May 2024, withdrawing the offer of part-time employment.

28      The respondent gave evidence that to save on costs she resumed cleaning duties herself, cut costs on items such as cleaning products, reduced the rental facilities used for product storage and cut back on advertising. The respondent submits that she was experiencing high levels of stress at this time.

29      The respondent says the administrative duties previously undertaken by the applicant are now shared between herself and another employee, being her son.

Questions to decide

30      The first question to be decided is whether the applicant was genuinely redundant?

31      If the answer to the first question is yes, then the second question to decide is whether the conduct of the respondent in the way in which the redundancy was effected was harsh, oppressive or unfair?

32      If the answer to the first question is no, then I must decide if the dismissal was harsh, oppressive and unfair in the circumstances.

Legal Principles – Unfair Dismissal and Redundancy

33      The Commission has jurisdiction to hear and determine a claim of unfair dismissal. Section 23A(1) of the Industrial Relations Act 1979 (WA) (IR Act) states:

The Commission may make an order under this section if the Commission determines that the dismissal of an employee was harsh, oppressive or unfair.

34      If the Commission determines that the dismissal was harsh, oppressive or unfair, it may order reinstatement, or where that is impracticable, it may order the employer to pay to the employee an amount of compensation for loss or injury caused by the dismissal under s 23A(6) of the IR Act.

35      The test of whether a dismissal was unfair is set out in Undercliffe Nursing Home v The Federated Miscellaneous Workers Union of Australia, Hospital Service and Miscellaneous W.A. Branch (1985) 65 WAIG 385 (Undercliffe):

The question to be investigated is not a question as to the respective legal rights of the employer and the employee but a question whether the legal right of the employer has been exercised so harshly or oppressively against the employee as to amount to an abuse of that right (386).

36      The Western Australian Industrial Appeal Court has held that an employer has the right to organise their business as they see fit, and the Commission can only interfere with an employer’s decision if the decision is industrially unfair: Amalgamated Metal Workers and Shipwrights Union of Western Australia and the Operative Painters and Decorators Union of Australia, West Australian Branch Union of Workers v Australian Shipbuilding Industry (WA) Pty Ltd (1987) 67 WAIG 733.

37      In Garbett v Midland Brick Company Pty Ltd [2003] WASCA 36; (2003) 83 WAIG 893 (Midland Brick), the Western Australian Industrial Appeal Court considered the circumstances where an employer decides to organise their business by reducing the number of employees, positions in their operations or makes changes to the organisational structure:

[74] Quite obviously there must be situations when an employer is entitled to exercise his legal right to terminate the employment of an individual employee, in accordance with the terms of the particular contract of employment, although there has been no serious misconduct or other breach of the terms of the contract of employment by the particular employee. The need to terminate a contract of employment may arise because of some change in the nature of the employers business, or a shift of business location, or some restructure genuinely considered by the employer to be necessary for the improvement or refinement of its business operations or for some other reason quite independent of the performance of the individual employee or employees. Terminations of employment for these reasons are often described as being because of redundancy, a term of somewhat variable meaning depending upon the context and circumstances. …

[75] That there may be genuine operational reasons rendering a particular employee redundant, which of themselves would justify an employer in terminating the employment of that individual employee, yet, because of the manner in which the termination was effected, the overall result can produce a harsh, oppressive or unfair dismissal has also long been recognised. FDR Pty Ltd & Ors v Gilmore & Ors; Gilmore & Anor v Cecil Bros & Ors (1998) 78 WAIG 1099 IAC, as already noted, is one example which recognises such a situation, notwithstanding that the case involved a bona fide redundancy, and also Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (1996) 65 IR 366 (IRC of Aust).

[76] In this State it has been held that the circumstances in which a redundancy will occur include not only the abolition of the job in question, but also when a workforce is reduced because there is labour in excess of that reasonably required to perform the work which is the employers business - Gromark Packaging v Federated Miscellaneous Workers Union of Australia, WA Branch (supra) per Franklyn J at 107. There being no definition of the term ‘redundancy’ within the Industrial Relations Act (1979), and because the concept is associated with the operational requirements of the enterprise of the employer I do not consider that it would be right to impose any narrow or technical limitation to the concept of redundancy in the setting of claims for relief from alleged harsh, oppressive or unfair dismissal under s 29 of the Industrial Relations Act. That there is some definition of the concept of redundancy in the Minimum Conditions of Employment Act (1993) is another matter which needs separate consideration and evaluation and is discussed later in these reasons. It is therefore important to consider the meaning and recognition which has been given to the concept of redundancy under other similar Australian industrial legislation. In R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Operative Ltd (1977) 16 SASR 6 Bray CJ held that a redundancy occurs where an employer no longer requires that work to be performed by anyone. It has been recognised, however, that it is not essential for all the work to have disappeared and that organisational restructuring may result in a position being abolished and the functions of that position being divided or given to others - Bunnett v Hendersonís Federal Spring Works Pty Ltd (1989) 31 AILR 356.

[77] Other examples of harsh, unjust and unreasonable or oppressive dismissals, notwithstanding a genuine redundancy, have been found where the employee is provided with no meaningful information about the reasons for the termination and no discussions are held with him or her with regard to the termination - Gibbs v City of Altona (1992) 37 FCR 216; where there had been no exploration of possible alternatives with the Applicant before the ultimate step of termination in order to remove the need for dismissal - Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 473; where there is a failure to apply fair and objective selection criteria in determining which employee is to be made redundant - Budget Couriers Equity Management v Beshara (1993) 5 VIR 173; where there has been no proper investigation of the facts or consultation with the employee about those facts and their consequences - Byrne & Frew v Australian Airlines Ltd (1994) 47 FCR 300 per Beaumont and Heerey JJ at 63 and Budget Couriers Equity Management v Beshara (supra); and where there has been a failure to provide adequate notice - Budget Couriers Equity Management v Beshara (supra).

Was the applicant’s dismissal unfair, oppressive or harsh?

38      The respondent’s evidence is that a definite decision to abolish the position occupied by the applicant and make her redundant was made prior to the meeting on 26 April 2024. In cross-examination, the respondent’s evidence is that she made the decision shortly after she had met with her accountant on 27 March 2024 (ts 47). However, the respondent’s evidence is also that she did not state that the applicant’s employment was terminated during her conversation with the applicant on 26 April 2024 (ts 48).

39      The respondent agreed that the applicant was not provided with written notice of termination of her employment. The respondent says she is aware that she was obligated to provide written notice of termination however she was too busy and did not have access to a computer at the time (ts 37). The respondent also submits that the applicant was given the required notice because she spoke with the applicant on 26 April 2024, and the applicant continued to be paid until the offer of a part-time contract of employment was withdrawn on 12 May 2024.

40      The respondent also admits that she did not pay the applicant a period of notice as required under her contract of employment, and the Award. The respondent’s rationale was that there was confusion because the applicant was on a period of annual leave at the time. Following the issue of payment in lieu of notice being raised with the respondent by the government regulator, the applicant was paid the equivalent of two weeks salary.

41      The applicant was not paid a redundancy severance payment as due under the Award and the terms of the Termination, Change and Redundancy General Order [2005] WAIRC 01715; (2005) 85 WAIG 1681 (General Order). The respondent’s evidence is that she was not obliged to pay a severance payment because she employed less than 15 employees. The respondent said under cross-examination that she could not recall whether she conducted a head count at the time of the applicant’s purported termination because of redundancy. The respondent’s evidence is the business employed 14 ongoing employees, which included two full-time employees, four part-time employees, eight ‘regular casual’ employees and five ‘probation casual’ employees (exhibit R6).

42      The respondent argues that they are not required to pay the applicant a severance payment because at that time there were under 15 ongoing employees when the so called ‘probationary casuals’ are excluded. However, the publication submitted by the respondent, ‘WA award summary Clerks (Commercial, Social and Professional Services Award) 1 July 2023’ sets out the obligation to pay severance pay and includes a link to the relevant information on Wageline which states: ‘An employer is required to provide a redundancy or severance payment to an employee if the employer has 15 or more employees (including casual and part-time employees)’ (exhibit R1). The category of ‘probationary casual’ does not exist and when casual employees are included in the head count, it is clear the respondent employed 18 employees at the time of the purported redundancy of the applicant.

43      On the evidence submitted by the respondent, the applicant ought to have been paid a severance payment as due under the Award and the General Order if the applicant had been made redundant.

44      The respondent could not recall the telephone conversation with the applicant concerning the extraordinary payment into the applicant’s bank account. The applicant’s evidence is that when she was on leave, she noticed an unusual payment and contacted the respondent. The applicant’s evidence is that she contacted the respondent by telephone who explained that the payment was the applicant’s accrued leave which needed to be paid out because she was going from full-time employment to part-time employment. The respondent says she could not recall the subsequent conversation with the applicant. The respondent’s evidence is that she advised the applicant of the need to pay out her accrued leave in their conversation on 26 April 2024.

45      I carefully listened to the evidence of the applicant and the respondent, and I prefer the evidence of the applicant. I find that the applicant did contact the respondent to question the extraordinary payment made and accurately recalled the respondent’s explanation.

46      Throughout the course of the hearing, the respondent’s evidence at times was vague and confused. The evidence of the applicant was clear and direct. Where the respondent’s evidence conflicts with the evidence given by the applicant, the clarity given by the applicant’s evidence gives greater weight.

47      I find that the respondent did not give the applicant notice that her employment was terminated on 26 April 2024. Further, I find that at that time, the respondent informed the applicant that the business was in the red and there was a need to reduce costs and consequently, the applicant’s full-time employment could not be sustained. However, the respondent did not inform the applicant that her position was to be abolished nor her employment terminated. The respondent proposed that on her return from leave, the applicant reduce her hours of work to part-time hours. I find that the applicant agreed to the proposal.

48      It may be that the respondent formed a view that the business could no longer afford to employ the applicant. However, this was not communicated properly. The respondent’s evidence is that duties undertaken by the applicant are now being done by herself and another employee (being her son) and the rate of pay for these duties has been reduced.

49      The respondent’s evidence is that the applicant’s duties have been distributed between two other employees. The applicant says that most of the time, the applicant’s duties are undertaken by one employee only and this means the job continues to exist. Accepting that the duties have been distributed to existing employee/s, this is consistent with Midland Brick. A dismissal is a genuine redundancy where the duties of a position are distributed to other employees. However, the respondent’s actions are not consistent with those expected in redundancy situations. As outlined in Midland Brick, where an employee is to be made redundant the respondent needs to communicate this clearly and provide reasons to the applicant about why she, and not another employee, was selected for redundancy.

50      The respondent’s communication and actions are not consistent with her obligations to inform the applicant that her employment would be terminated and explain the reasons for selecting her position, consult with her about alternatives, consider any alternatives identified, provide notice and pay a severance payment as required. The respondent did explain that there was a need to cut costs, however, this was in the context of a proposal to the applicant that she reduce her hours of work to part-time hours. Even when the applicant contacted the respondent to ask about the extraordinary payment received, the applicant was not informed that the applicant’s employment was or was going to be terminated.

51      In my view, it is not credible for the respondent to maintain that a decision to make the applicant redundant had been made and communicated to the applicant on 26 April 2024. The evidence points to the respondent and the applicant agreeing during that conversation that the applicant would reduce her hours of work. For example, the respondent would not have emailed the applicant with a contract of employment for agreed reduced hours of work on 11 May 2024, along with other changes not agreed, if the respondent had previously decided to terminate the applicant’s employment on 26 April 2024.

52      I find on the evidence before me, that the respondent acted on and communicated a decision to end the applicant’s employment at 6.45 pm on 12 May 2024 by sending the applicant a message informing that the proposed part-time arrangement was withdrawn. It is in this message that the respondent communicates that this was the end of the employment relationship with the words: ‘We appreciate and thank you for all your effort in service with us. Konan will be in touch to retrieve mobile phone and any properties that belong to Smurfettes Cleaning Services’ (exhibit A4).

53      Consistent with Midland Brick, even if the termination of the applicant’s employment was a genuine redundancy, the way in which the respondent effected the termination was harsh and unfair.

54      I find the respondent’s actions in terminating the applicant’s employment were harsh and unfair because the respondent did not communicate to the applicant that her position was to be abolished, and she would be made redundant. Further, the respondent’s actions communicated an intention that the applicant would continue to be employed albeit at fewer hours. The way the respondent ultimately communicated the decision to dismiss was harsh. The respondent’s message that ‘we will be withdrawing our offer of employment to you’ was abrupt and without warning nor notice. If the respondent had decided to terminate the applicant’s employment on 26 April 2024 and thereby provide the required period of notice for a termination effected on 12 May 2024, the respondent maintained a facade of ongoing employment for the applicant. The proposed and agreed ongoing employment on reduced part-time hours, was disingenuous.

55      In addition, the dismissal was harsh given the personal circumstances of the applicant and the challenges faced by the applicant in finding suitable employment. The respondent admitted her knowledge of these circumstances and her understanding of the challenges faced by the applicant.

56      I find that the dismissal of the applicant was harsh and unfair. Given this conclusion, I will hear from the parties as to the remedy and form of orders to issue.