Consultation Obligations Under the Fair Work Act

In Orientile Pty Ltd v Carson Q Zhang [2026] FWCFB 162, the Full Bench of the Fair Work Commission (FWC) confirmed thatsmall businesses must comply with the same redundancy consultation obligations as larger employers.

Under the Fair Work Act 2009 (Cth) (FW Act), section 389, a dismissal is a genuine redundancy only if the role is no longer required and the employer has complied with all applicable consultation obligations in any award or enterprise agreement. Consultation requires employers to:

• inform the employee of the proposed change;
• provide relevant information;
• allow the employee to respond and raise alternatives (including redeployment); and
• genuinely consider those matters.

Case Summary

In 2025, Orientile (a small business) dismissed a sales representative without undertaking the consultation process required under a modern award. The Fair Work Commission (Commission) found the redundancy was not genuine and ordered compensation totalling $31,652.93 plus superannuation. Although small businesses are exempt from statutory redundancy pay under the Fair Work Act 2009 (Cth), section 119, the Commission used the scale as a guide due to the employee’s period of employment.

In the first instance, Orientile argued that the redundancy was genuine for the purposes of the FW Act, section 389, and alternatively, that the dismissal was consistent with the Small Business Fair Dismissal Code (Code). These arguments were not successful.

Appeal Outcome

In the Appeal, Orientile argued that as a small business, it was not required to undertake redundancy consultation and could rely solely on the Small Business Fair Dismissal Code — a set of Fair Work Commission guidelines that small businesses (fewer than 15 employees) can use to show a dismissal was not harsh, unjust or unreasonable. The Full Bench rejected this, holding that:

• failure to consult meant the redundancy was not genuine;
• the Code does not override award consultation obligations; and
• small businesses cannot rely on the Code as a complete defence—FWC must still assess fairness under s 387.

The Appeal was permitted to proceed, but dismissed. The Full Bench did not determine that the dismissal was a genuine redundancy.

Key Takeaways

• Small business employers are not exempt from redundancy consultation obligations under the FW Act or modern awards.
• The size of the business does not reduce or modify the definition or procedural requirements of a genuine redundancy.
• To rely on the protection of “genuine redundancy” employers must fully comply with all consultation obligations.
• Failure to consult will expose employers—even small businesses—to unfair dismissal findings.

Implication for Employers

Before implementing redundancies, employers should review their obligations under the FW Act and any applicable award or agreement to ensure proper consultation and minimise legal risk.

Frequently Asked Questions

Do small businesses have to consult employees before a redundancy in Australia?

Yes. If a modern award or enterprise agreement applies to the role, small businesses must comply with its consultation requirements before a dismissal can be treated as a genuine redundancy under section 389 of the Fair Work Act 2009 (Cth).

What is a “genuine redundancy” under the Fair Work Act?

A dismissal is a genuine redundancy under section 389 if the employer no longer requires the role to be performed by anyone, has complied with any consultation obligations in an applicable award or agreement, and could not reasonably have redeployed the employee elsewhere in the business or an associated entity.

Does the Small Business Fair Dismissal Code protect employers from unfair dismissal claims?

Not automatically for redundancies. As Orientile v Zhang confirms, the Code does not override award-based consultation obligations, and the Fair Work Commission must still assess overall fairness under section 387 of the Act.

If your business is planning redundancies, Tailored Legal can review your consultation process and award obligations before you act. Contact us for tailored advice.