Genuine redundancy or unfair dismissal? The FWC decides

In the recent Fair Work Commission (FWC) case of Kay v Fulton Hogan Construction Pty Ltd [2025] FWC 330, the FWC reviewed Mr Kay’s dismissal due to redundancy. It found that while Fulton Hogan Construction Pty Ltd (Fulton Hogan Construction) failed to properly consult with him, the dismissal was not harsh, unjust, or unreasonable.

Here, our experts break down the case and explain the FWC’s findings.

Legal framework

Genuine redundancy serves as a complete defence to an unfair dismissal claim. To determine whether a redundancy is a ‘genuine redundancy’, we refer to s 389 of the Fair Work Act 2009 (Cth) (Fair Work Act).  Under the Fair Work Act, a dismissal is considered a genuine redundancy if:

• The employer no longer requires the role to be performed due to changes in operational requirements; and

The employer has met any consultation obligations regarding the redundancy, as outlined in a modern award or enterprise agreement.

However, the dismissal isn’t a genuine redundancy if it’s possible for the person affected to be redeployed within:

1.  the employer’s enterprise; or
2.  the enterprise of an associated entity of the employer.

What prompted the complaint to the FWC?

Mr Kay commenced employment with Fulton Hogan Construction in 2022, working on the Walkerston Bypass Project (Project) as a Leading Hand.

On 30 November 2023, Mr O’Connor, Superintendent, met with Mr Kay and provided him with a letter titled ‘Notice of organisational change’. The letter advised Mr Kay that there were organisational changes to be made as a result of the project almost being complete, and if there were no suitable roles available, Mr Kay’s employment would end due to redundancy. Mr O’Connor met with four other employees that day, in connection with redundancies.

Mr Kay claimed that Mr O’Connor, when handing him the letter, informed him that the Senior People & Culture Advisor, (Mr Forde) would tell him all about the letter the following week. Mr Kay signed and dated the letter, as instructed by Mr O’Connor. Mr Kay claims that Mr Forde called him on 5 December 2023, stating there was no more work. Mr Forde didn’t respond to this allegation. It seems that Fulton Hogan Construction had wanted to give notice of termination on 7 December 2023, but it was unable to reach Mr Kay due to him being on his rostered day off.

On 11 December 2023, Mr Forde spoke to Mr Kay by telephone and confirmed that his role would be made redundant, and his employment would end.

Mr Kay’s arguments to the FWC were around whether direct hire employees should’ve been retained, if labour hire employees were being engaged, the selection criteria for redundancy, and whether his role was genuinely redundant.

Mr Kay also asserted that other employees who weren’t made redundant were retained due to ‘nepotism’.

Consultation obligations

If a modern award or enterprise bargaining agreement applies to an employee, the employer must follow its consultation requirements regarding redundancy.

In Mr. Kay’s case, the enterprise bargaining agreement included a model consultation term from legislation. This required the employer to:

• As soon as practicable after making a decision, discuss the decision with affected employees, the introduction of the change, the effect it was likely to have, and the steps the employer was taking to mitigate the changes; and
• Provide in writing all relevant information about the change, specifically including the nature of the change and the effects of the change, and any other matter that could affect the employees.

What did the FWC find?

Fulton Hogan Construction sought to establish before the FWC that Mr Kay’s Leading Hand role was genuinely redundant, within the meaning of s 389 of the Fair Work Act. In considering the question of whether the termination of Mr Kay’s employment was a genuine redundancy, the FWC found:

• Mr Kay’s role was no longer required to be done by Mr Kay or anyone.
• Fulton Hogan Construction failed to meet its consultation obligations under the Enterprise Bargaining Agreement because, after 30 November 2023, it only informed Mr. Kay of the decision instead of consulting with him or sharing information. The FWC observed ‘The employer’s failure to consult to the extent required under the Agreement weighs in favour of a finding that the dismissal was unfair, but not as strongly as would have been the case if there was no attempt at consultation whatsoever.’

As Fulton Hogan Construction hadn’t met its obligations to consult, its jurisdictional objection to Mr Kay’s claim was unsuccessful.

The FWC then turned to whether the dismissal was harsh, unjust or unreasonable. The FWC was satisfied that Mr Kay’s dismissal was not harsh, unjust, or unreasonable.

The FWC made the following observations in this regard, where Fulton Hogan Construction said that it had considered redeployment options for Mr Kay, the lack of consultation meant that it was difficult to consider whether Mr Kay would have relocated, or accepted work at a lower classification.  The FWC found that although this was relevant to consider, there was no evidence of suitable roles in different locations or classifications and, therefore, this didn’t weigh against Fulton Hogan Construction. The FWC observed that the downsizing and Mr Kay’s redundancy were valid reasons for termination. The FWC also observed that where Fulton Hogan Construction said that it had considered redeployment options for Mr Kay, the lack of consultation meant that it was difficult to consider whether Mr Kay would have relocated, or accepted work at a lower classification.  It found that although this was relevant to consider, there was no evidence of suitable roles in different locations or classifications and, therefore, this didn’t weigh against Fulton Hogan Construction.

The FWC found Mr Kay’s claims of nepotism weren’t true. Rather, it was found that the redundancies were based on skills required for the remaining work.

The result

Employers must handle redundancy and retrenchment processes carefully and concerning their obligations under modern awards and enterprise agreements. To reduce the risk of unfair dismissal claims, employers should review all relevant documentation, such as enterprise agreements, modern awards, redundancy policies, and contracts, before making final decisions about an employee’s employment.

About our author

Zaynab Aly is a Solicitor at Citation Legal. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.