As first reported on www.ragtrader.com.au, Fair Work Australia (FWA) ruled a series of redundancies made by the company earlier this year were not genuine, because executives failed to consult affected employees about their plans.
Five employees across merchandising and quality control brought the case before the industrial relations watchdog, with another case now flagged to determine whether the terminations were harsh, unjust or unreasonable.
During the hearing, it was revealed the company had been exposed to adverse trading conditions over 2010/11. From February this year, executives worked to assess the causes of profit declines and ways to improve cost efficiencies.
A decision was made to restructure the design and production department on June 1, making 21 out of 72 roles redundant. Specialty Fashion Group also moved to have more post production work conducted in Bangladesh, Cambodia, India and China.
In delivering the news to employees on June 23, chief executive Gary Perlstein said tough times meant it would need to adapt its business strategy.
“About two years ago, we commenced the ‘new world’ project in pursuit of a design lead business with the goal of giving us a competitive edge within the Australian marketplace.,” he said. “But despite the tremendous effort and work, the strategy requires a change in direction.”
The company offered a number of support services throughout this process, including a psychologist, career transition programs and prompt entitlement payments. However FWA vice president Graeme Watson found the five affected employees were entitled to a consultation process because they fell within the Textile, Clothing, Footwear and Associated Industries Award.
While the company alleged its “one on one” discussions with employees was adequate, Watson said they were told of the decisions without an opportunity for input or consideration of alternatives to redundancy.
Specialty Fashion Group did not return Ragtrader’s request for comment at time of press. The group employs 4700 staff and operates Millers, Crossroads, Katies, City Chic and La Senza.
Assia Benmedjdoub