The End of the Line – Genuine Redundancy and Redeployment

June, 2016

If it is apparent that an employer no longer requires a particular position to be done by anyone because of changes in operational requirements, how should it look at proceeding with a redundancy?

Can unfair dismissal applications come into play if matters are not handled carefully?

There matters were recently examined by the Fair Work Commission in the matter of Sharp.

The Facts

The worker’s employment was terminated with a number of other individuals as part of an automation process and restructuring of the employer’s Port Botany container terminal.

Over 160 workers had been made redundant as a part of this process.

The worker was a straddle driver, a position identified as one which would be made redundant. The worker sought three other redeployment options as part of the relevant redundancy selection process.

The worker was ruled out of his first two preferred redeployment position options by the employer. Although the worker was initially ranked behind others to obtain his third choice position option as a Permanent Irregular Roster stevedore (PIR), initially leaving him out of contention for selection, his ranking improved as other employees ahead of him took voluntary redundancies.

Eventually, the worker ascertained that he had “made the cut” in terms of selection for a PIR position. Other employees who had also apparently been selected were given “provisional” offers of redeployment.

An HR manager for the employer subsequently told the worker to remain on “gardening leave” until the commencement of automated operations on 29 March 2015, after the worker advised the HR manager of his understanding that he had made the selection criteria.

The worker was then subjected to a voluntary redundancy process. The worker and his union then made representations to the employer to the effect that the worker was not seeking a voluntary redundancy.

It was suggested that the employer was under the apparent mistaken belief that the worker had sought a voluntary redundancy, and had taken him out of the list of eligible employees for the PIR positions.

A grievance process which had been utilised by the worker in relation to the decision did not lead to the decision being changed, but it permitted the worker to lodge an appeal within seven days. The appeal was lodged out of time and was rejected by the employer. As a result, the worker (through his union) made an unfair dismissal claim on the basis that the worker’s employment was not terminated as result of a genuine redundancy.

The employer argued in this case that the worker’s employment was terminated as a result of a genuine redundancy. The union acting for the worker argued that it would have been reasonable for the worker to have been redeployed within the employer’s enterprise.

The Fair Work Commission was required to determine whether the termination arose as a result of a genuine redundancy, before determining if the worker had been unfairly dismissed.

Findings

The Commission heard the arguments from both parties on the issue of genuine redundancy and whether the dismissal was unfair together.

In determining that the redundancy was not genuine, the Commission found:

The proposition that (the employer) sought to advance whereby, because those individuals who had been advised of their inclusion in the “first” 91 PIR positions as at 29 March 2015, meant that the positions were filled, and therefore there was no available position to which the (worker) could be redeployed, ignored the provisional nature of all of the offers of redeployment. The provisional appointment arrangements were specifically adopted as a means to address the very circumstances that arose for the (worker)”.

The Commission additionally found that the dismissal was unfair in the circumstances, in that the employer had failed to follow its established policy and procedures (by invoking a “voluntary” redundancy when this had never been sought by the worker).

The Commission ordered a reinstatement of the worker to his position and the restoration of his lost pay.

Conclusion

While many cases turn on their own facts, this case demonstrates that when redundancies are being contemplated by employers, the processes and procedures around them need to be carefully considered.

For example, employers may need to consider whether any employees in question need to be consulted about the redundancies, and as in this case, whether redeployment is an option in establishing whether a redundancy is genuine.

The employer may also need to consider the redundancy payment that may need to be made to an employee whose position is being made redundant, and whether applications can be made to reduce that amount.

It is recommended that employers seek advice on these potentially complicated matters if and when the issue of redundancies arise.

Contact Mills Oakley

Ross Levin | Partner
Melbourne
T: +61 3 9605 0070
E: rlevin@millsoakley.com.au

Malcolm Davis | Partner
Sydney
T: +61 2 8035 7932
E: mdavis@millsoakley.com.au

Adam Lunn | Partner
Melbourne
T: +61 3 9605 0868
E: alunn@millsoakley.com.au

Lisa Anaf | Partner
Melbourne
T: +61 3 9605 0857
E: lanaf@millsoakley.com.au

 

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