Redundancy and “Standards of Decency” – No Exemption for Small Business

| July 24, 2025

The Case: Parental Leave and a Redundancy via Email

In Stien v Hire A Hubby Pakenham [2025] FWC 510, the Fair Work Commission examined a small business’s decision to make an employee redundant while she was on parental leave. Mrs Laura Stien, an office administrator, commenced 12 months of unpaid parental leave in October 2023. During her absence, the owner’s wife temporarily filled the admin role. Over the next year, the business’s fortunes declined – competition increased, a staff member left, and the owner downsized operations to cut costs. By late 2024 the business had shrunk to “a business of two” (essentially the owner and one handyman), and the office admin role was deemed surplus. 

Crucially, Mrs Stien had written to request an additional 12 months of parental leave (beyond the initial year) as allowed under the Fair Work Act 2009. The owner, Mr Moore, eventually responded by email on 11 December 2024, informing her that her request was denied and that her position was redundant due to the downturn. That email effectively terminated her employment, with no prior discussion or face-to-face meeting. Mrs Stien – who had expected to return to work – was taken by surprise and lodged an unfair dismissal claim. 

Why the Redundancy Wasn’t “Genuine” 

The employer argued it was a “genuine redundancy” and, being a small business, claimed the dismissal complied with the Small Business Fair Dismissal Code. However, the Commission disagreed. Under the Fair Work Act 2009 (FWA) , a redundancy is only genuine if all criteria are met – including the obligation to consult any affected employee under any applicable modern award. In this case, the Clerks – Private Sector Award 2020 applied to Mrs Stien’s role. Clause 38 of that Award required the business to consult with her about major workplace changes like a job becoming redundant. Consultation means giving notice of intended changes and discussing alternatives or measures to reduce the impact. 

Mr Moore admitted he decided in mid-October 2024 to abolish the admin role (around the time Mrs Stien would have been due back). Yet, he never informed or consulted Mrs Stien at that time. In fact, she only learned of the decision after she emailed to ask why her leave extension was refused – nearly two months later. Telling someone they’re redundant after the final decision (and only because they inquired) is not genuine consultation. The Commission found that Hire A Hubby Pakenham failed to comply with its consultation obligations under the Clerks Award, so the dismissal did not meet the definition of a genuine redundancy. This meant Mrs Stien’s unfair dismissal claim could proceed despite the employer’s “redundancy” defence. 

Additionally, the Commission noted that section 83 of the FWA (part of the National Employment Standards) specifically requires employers to consult with any employee on unpaid parental leave if a decision is made that could significantly affect their pre-parental leave position. Hire A Hubby Pakenham breached this obligation as well. These failures weighed heavily in the Commission’s finding that the termination was unfair. 

Basic Decency and Communication Counts 

Beyond the legal technicalities, the Commission was critical of the employer’s lack of basic courtesy in handling the situation. Commissioner Redford drew a line between a small business owner’s possible ignorance of HR formalities and “a failure to adhere to basic standards of decency” towards an employee. The real failing here was not some obscure legal mistake – it was Mr Moore’s failure to pick up the phone and personally inform his employee (who was on leave and unaware of the business’s troubles) that her role was in jeopardy. Small business or not, he should have proactively communicated the evolving situation. The Commission noted there was no excuse for not calling or arranging a meeting once he knew he “could not continue with” her role. 

The Commission emphasized that even for a very small operation, a lack of HR expertise does not excuse ignoring fundamental fairness. In fact, failing to keep an employee on parental leave in the loop about major changes was seen as especially unfair – the absence of communication “accentuated” the unfairness in this case. In the end, the Commission found the dismissal harsh and unreasonable, ruling it an unfair dismissal.  

Lessons for Employers

In sum, the Hire A Hubby Pakenham decision is a reminder that open communication and proper consultation aren’t just legal boxes to tick during a redundancy process – they reflect the “standards of decency” that the Fair Work Commission expects in every workplace irrespective of size of the operation. Employers must: 

• Consult early
  If a modern award applies, you must consult before making redundancy decisions. Failing to do so can render a dismissal unfair. 

• Stay connected
  Employees on parental leave are still employees. Keep them in the loop about major business changes. 

• Respect parental leave rights
  Under the FWA , you must inform and consult employees on leave about changes affecting their role. 

• Communicate with decency
  Don’t deliver life-changing news by just an email. A timely, respectful conversation matters. 

• Know your obligations
  Being a small business doesn’t excuse non-compliance. If in doubt, seek advice early. 

By respecting these standards, businesses can manage necessary downsizing while minimizing the risk of unfair dismissal claims. Ultimately, redundancy processes must reflect not just legal compliance—but basic fairness and decency . At IRIQ, we’re here to support you every step of the way through these difficult business decisions. 

Final Thoughts

This case illustrates that even small businesses must meet both legal and human standards when managing redundancies. Failing to consult with employees on parental leave or relying on impersonal communication can render a dismissal unfair.

At IRiQ Law, we help employers meet their obligations with confidence and care. From redundancy planning to parental leave compliance, our team is here to support fair, lawful outcomes.

📞 Contact our team to ensure your approach reflects both compliance and decency today.