A popular Southern Tasmanian cheese and chocolate producer has failed in its attempt to avoid paying redundancy packages to two former employees.
Coal River Farm made two workers redundant in May at the height of the COVID-19 pandemic in Tasmania, but applied to the Fair Work Commission to reduce their payouts to zero on the basis the business simply couldn't afford the $24,000 owed, citing an almost total loss of revenue and a sizeable debt to the Australian Taxation Office.
The Fair Work Commission requested detailed financial information from the fresh produce and tourism business - owned by Tourism Industry Council member Daniel Leesong - to support the claim of not being able to pay, but it missed the first deadline.
The FWC also heard it was in the process of opening two WA stores in Perth and Fremantle and had advertised for positions there, but would go insolvent should the new ventures not go ahead.
In the end the application was dismissed by Commissioner Tanya Cirkovic who found insufficient financial evidence that Coal River Farm was incapable of paying the redundancies.
"Despite being provided ample opportunity to adduce evidence to the Commission as to its financial position, the Applicant chose to rely on an unverified P&L, a screenshot of a bank account with no name and a document purporting to evidence the Applicant’s creditors containing no information or detail. Even if I were to accept Mr Leesong’s evidence as to the foreshadowed cash flow issues, the evidence before me as to the Applicant’s complete financial position, is, in my view, insufficient to establish an incapacity to pay and enliven section 120(2) of the Act," she said.
"I acknowledge the very difficult challenges faced by the Applicant in the current uncertain environment and note that it is a time of great stress and concern for the Applicant and many other business owners. However, it is insufficient to demonstrate that it that it is merely beneficial or of assistance to reduce the amount to be paid by way of redundancy."