Consultation obligations
Under section 389 of the Fair Work Act 2009 (Cth) (FW Act), a dismissal will be a case of genuine redundancy if:
- the employer no longer requires the employee’s job to be performed by anyone because of operational changes
- the employer has complied with any applicable consultation obligations; and
- it would not have been reasonable for the employee to be redeployed within the employer’s enterprise or an associated entity.
Modern awards and enterprise agreements require employers to consult with employees covered by those instruments about major workplace change, including proposed redundancies.
Consultation must be meaningful. It must give affected employees a genuine opportunity to understand the proposed change, raise concerns and suggest alternatives before an irreversible decision to dismiss is made. Consultation is not satisfied by simply informing an employee that they have already been selected for redundancy and their employment is to be terminated, and then inviting them to comment.
In Orientile Pty Ltd v Zhang [2026] FWCFB 162, the Full Bench of the Fair Work Commission (Commission) confirmed that these obligations apply to employers of all sizes, including small businesses. If an employer is required to consult and fails to do so, the dismissal will not satisfy the statutory definition of a genuine redundancy, even if the employer no longer requires the role to be performed.
Orientile Pty Ltd v Zhang [2026] FWCFB 162
Facts
The Employee was employed as a sales representative for almost 15 years. The Employer was a small business with nine employees, including three sales representatives.
In early 2025, the Employer decided that the business could no longer afford to employ all three sales representatives because of declining sales. That same morning, the Employee was called into a meeting and informed that he was being dismissed. He was then required to clear his belongings and was paid five weeks’ wages in lieu of notice.
The Employer argued that the meeting constituted consultation. It also argued that, although another sales representative was a potential candidate for redundancy, it was unnecessary to consult with that other sales representative because the Employee had not challenged the decision during the meeting.
The Employee applied to the Commission for an unfair dismissal remedy.
Decision of the Deputy President
The Deputy President found that the dismissal was not a genuine redundancy because the Employer had failed to comply with the consultation obligations in the applicable award.
By the time of the meeting, the Employer had already decided that the Employee would be dismissed. The Employee was informed of the decision at the beginning of the meeting and was not given a genuine opportunity to influence the outcome.
The failure to consult also meant that the Employer did not explore whether another employee was willing to accept redundancy or whether other alternatives could avoid dismissal.
The Deputy President also considered the speed of the dismissal, the Employee’s long service, the absence of established selection criteria and the financial impact on the Employee.
The dismissal was found to be harsh, unjust and unreasonable and the Employee was awarded $31,652.93 in compensation, together with superannuation contributions of $884.62.
Appeal to the Full Bench
The Employer appealed the decision, arguing that the Commission had not sufficiently considered its status as a small business, including its financial capacity and the practical effect of its size on the redundancy process. It also argued that the Small Business Fair Dismissal Code applied and that the Commission had wrongly referred to the redundancy payment scale in section 119 of the FW Act when assessing compensation.
In dismissing the appeal, the Full Bench confirmed that small businesses are not exempt from consultation obligations. Under the model consultation term found in modern awards, once an employer decides to implement a major workplace change, it must consult affected employees as soon as practicable. In doing so, the employer must provide written information about the proposed change and its likely effects, discuss ways to avoid or minimise adverse effects, and consider matters raised during consultation.
The Full Bench emphasised that consultation may be particularly important in a small business, where the loss of one role may significantly affect both the departing employee and the employees who remain.
Key takeaways for employers
- Check if an award or enterprise agreement applies to the impacted employees because those instruments set out consultation obligations regardless of the size of the employer.
- Consultation must be genuine and occur before an irreversible decision to dismiss is made. A discussion held only after an employee is told they are being dismissed does not satisfy the obligation and defeats a ‘genuine redundancy’ defence.
- Consult meaningfully by notifying affected employees in writing as soon as practicable, explaining the nature of the change and its likely effects, and considering any suggestions to avoid or minimise those effects.
- Consider alternatives to dismissal, such as redeployment, job sharing, voluntary redundancy, reduced hours or delaying the termination. Failure to explore genuine alternatives can contribute to a finding of unfair dismissal.
- Keep proper, detailed records by documenting the information provided to affected employees, issues raised by employees, alternatives considered and the reasons for the final decision.
If you have any questions about the issues raised in this article or would like assistance with matters related to redundancy consultation obligations, please contact a member of our workplace relations and safety team.
