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JobKeeper not a bar to "genuine" redundancies

03 February 2021
An employer is not obliged to keep an employee employed because of the availability of JobKeeper payments where the employee's job is genuinely redundant. However, employers can expect that the Fair Work Commission (FWC) will closely scrutinise any such redundancies because the retention of the employee may be consistent with the objectives of the JobKeeper scheme (Mr Rhayne Cooper v The Trustee for Cleveland 24/7 Unit Trust [2020] FWC 6715.) 


The Applicant was employed in the position of Gym Manager. His employment was terminated on 9 April 2020 by way of redundancy. The Applicant was not consulted as required by the Fitness Industry Award 2010, with the result that the redundancy was not "genuine".

The Applicant was the only Gym Manager in the group to have his employment ended by way of redundancy. The group also regularly advertised for new managers in anticipation of needing them. 


The FWC found the dismissal was "unfair" because:

  1. The Respondent did not provide a credible explanation as to why the Applicant was the only manager in the group to be made redundant during the pandemic. 
  2. The group kept every other Gym Manager in employment during the period when gyms were required to be closed due to the pandemic, on the basis they would be required when the effects of the pandemic faded. The group advertised for additional managers in May 2020 for the same reason. 
  3. There was no cogent reason why the Respondent could not have maintained the Applicant in employment and paid him the JobKeeper subsidy, given the regular and ongoing requirement for Gym Managers for the Respondent to operate its business.
  4. It was more probable than not the Respondent took an opportunity to dismiss the Applicant under cover of the pandemic in circumstances where there was no valid reason for the Applicant to be dismissed.
  5. The dismissal was harsh because of the impact on the Applicant's personal and family circumstances, including that the Applicant was the sole income earner for his family which included two young children and he also withdrew funds from his superannuation account to pay living expenses. 


With respect to remedy, the FWC found that had the Applicant not been dismissed on 9 April 2020, he would have remained employed by the Respondent until 31 October 2020. As the Respondent was eligible for JobKeeper subsidies, the Applicant would have earnt $750.00 per week for the period from his dismissal on 9 April 2020 to 28 September 2020. By that time, the Respondent's gyms would have reopened and thereafter until 31 October 2020 the Applicant would have earnt his usual weekly rate. The FWC ordered the Applicant be paid the sum of $21,230.00 less tax. 

If you require further information or have any queries in relation to this legal update, please contact Mark Curran or Matthew Smith. 

Further Reading