Coal River Farm fails attempt to avoid virus redundancy payments

Coal River Farm, Tassie producer of fine cheese and chocolate, has lost a legal battle to avoid paying redundancy costs. Find out what its laid-off employees had to say.

Coal River Farm Daniel Leesong will need to fork out $24,000 in redundancy costs after failing to prove his business was in dire straits following the COVID-19 downturn. Picture: SAM ROSEWARNE.

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COAL River Farm at Cambridge has failed to prove it shouldn’t have to pay two of its employees $24,000 in redundancy costs following the impacts of COVID-19.

The farm, which is known for its deluxe cheese and chocolate products, made two of its employees redundant as of June 1 this year after an industry-wide downturn in business.

It then applied to the Fair Work Commission to reduce the redundancy entitlements to nil, arguing it couldn’t afford the payments.

But in her newly-published decision, Commissioner Tanya Cirkovic said Coal River Farm had failed to provide evidence of its incapacity to pay.

Director Daniel Leesong said a restaurant employing his five-year employee had closed down, while travel restrictions had impacted the other Coal River-based employee.

He also argued Coal River’s food and beverage operation had suffered a 100 per cent loss in revenue, an 80 per cent downturn in revenue overall and wouldn’t return to its pre-COVID income levels for two years.

Mr Leesong also claimed his business relied heavily on Asian and interstate tourists, who could no longer visit Tasmania, and that it relied solely on JobKeeper payments to keep 22 employees on its books.

He also argued the business could possibly become insolvent over the coming months.

But the two employees claimed Coal River’s claims were unverifiable, could be false or inaccurate, and were missing key details – arguing the farm’s documents didn’t take into account any of the government incentives or grants it was receiving.

The two men also provided the commission with screenshots from recruitment website SEEK showing Coal River Farm was recruiting a store manager to work on businesses it was opening in Perth and Fremantle.

One of the employees said he supported his wife and two children – one with special needs – while the other man said he was fearful about needing to sell his house due to a long period of unemployment.

Neither men have since found new jobs.

Commissioner Cirkovic dismissed Coal River Farm’s application, meaning the first employee will receive more than $19,000 in redundancy entitlements and the second worker will get almost $5000.

“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,” she said.

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