REDUNDANCY: WEALTHY MULTI BILLION DOLLAR COMPANIES MORAL OBLIGATIONS AND CONTRIBUTION
“What the world needs now is solidarity. With solidarity we can defeat the virus and build a better world” – United Nations Secretary – General Antonio Guterres.
The coronavirus (COVID-19) pandemic is an ongoing global pandemic, to which is one of the most precedenting and uncertain times in all our lives.
As the World Health Organization (2020) explains, the coronavirus is an infectious disease which mainly affects the respetatory system. Where many countries, including Australia, have spent hundreds or billions of dollars in attempt to stop the spread. Not only have we seen it have a massive strain upon our health system, but also our economy. Aa a result, both business owners and employees are left to suffer from the economic impact the virus has had on many levels.
As months, even weeks and days pass by during the coronavirus pandemic and lockdown companies are being forced to cut jobs, or even shut their operations overall. According to the Australian Bureau of Statistics (2020), in April 594,300 people lost their jobs due to the coronavirus and restrictions placed by the Government. The following month the Australian Bureau of Statistics (2020) reported another 227,700 jobs were cut due to the coronavirus.
Many businesses rely on customers physically visiting their premises, especially those within the hospital and retail industries, such as café owners. Therefore, having the Government restrictions in place that enforce the 1.5 meter social distancing rule, mandatory sign-ins, prepared COVID-safe plans and capping the number of patrons allowed inside venues in hope to stop the spread. Especially even more so in Victoria, where the state is currently in Stage 3 restrictions where citizens are only allowed to leave their homes for ‘essential’ reasons, with cafes and restaurants only being allowed to offer food and drinks take-away. As a result, these businesses are left suffering as there is no option for their employees to work from home or at all beneath these restrictions.
Although there is the JobKeeper Payment from the Australian Government to help more Australians in the workforce and support businesses affected by the economic impact the Coronavirus has. On 21 July 2020 the Government announced further restrictions upon eligibility and payment rates. Therefore, despite this JobKeeper Payment scheme, if an employer is not eligible to redeploy their employees and minimize the cost of operating their company they are left with the difficult decision to have to make certain roles within their companies redundant.
Redundancies occur when an employer decides to reduce their workforce because a job or jobs are no longer required.
There are many reasons why a company may decide to make an employee redundant, to which is no reflection upon the employees ability to perform a role but rather:
• New technology making the role unnecessary;
• The role the employee was hired to complete no longer exists;
• The employer needs to cut costs by reducing staff numbers;
• The business is restructuring;
• The business is closing down or moving;
• The business has been bought by another company;
• There is a significant or delayed downturn in business.
Likewise, a company may decide to make an employee redundant due to the unfortunante effect the Coronavirus has had on their business. Where as a result the role is no longer necessary or the business cannot afford the role anymore. However, this redundancy must be genuine. Beneath the Fair Work Act 2009, an employee can make an application of unfair dismissal to the Fair Work Commission where they believe their dismissal was not a genuine redundancy.
What is a genuine redundancy?
To be eligible for an unfair dismissal claim, they must ensure they are covered by a Modern Award or if an enterprise agreement applies to them and have completed the minimum employment period. To which is one year for employees of a small business (ie a business with less than 15 employees) or six months for an employer who is not a small business.
A genuine redundancy is where an employee is being dismissed as the employer does not require their role to be filled anymore. Furthermore, a redundancy will be genuine where the employees role cannot be performed by anyone due to changes in the operational requirements of the company.
A redundancy will not be genuine if the employer:
• Still requires the employees role to be done by someone;
• Could have reasonably, within the circumstances, provided the employee another job within the employer’s business;
• Has not followed the consultation requirements as required by the relevant Modern Award of enterprise barganining agreement.
Not only is it important that if an employer decides to make a role redundant, that it must be genuine but also that consultation process took place. The consultation process outlines the things that the employer needs to do when they decide to make changes to the company that will likely cause redundancies to take place. This must occur as soon as possible after this decision has been made.
What does consultation require?
The consultation requirements include the employer:
• Notifying the employee who may be affected by this change;
• Providing the employee with information regarding this change and the expected effects;
• Disclosing the steps taken to avoid and minimize the negative effects on the employee;
• Considering the employees ideas or suggestions regarding this change.
Interestingly, in the decision of UES (Int’l) Pty Ltd v Harvey, an employee was made redundant due to the employer not requiring this role anymore as there was a decline in business. However, it was found not to be of a genuine redundancy, as the employer did not consult with this employee.
Are there any alternatives an employer can take before considering redundancy?
A redundancy should always be an option of last result. An employer should value their employees and their hard work, especially during these harsh times the pandemic. Therefore, instead an employer can consult their employees about the following options:
• Taking leave, for a specific period an employer can ask an employee to consider taking out paid leave or unpaid leave, whilst the business is placed beneath these restrictions or otherwise applicable.
• Job sharing with another employee or part-time work, an employer may ask an employee to change their employment contract hours down to part-time or share the hours and duties with another employee.
• Reducing in hours or pay, an employer may ask an employee to reduce the amount of hours they are working at the company or take a temporay pay cut. However, these reductions must still meet or be above the minimum requirements of the Modern Award system.
• Non-contractual benefits, an employer may decide to reduce or stop the monetary benefits they provide to their staff as an attempt to lower costs and expenditure. This may include bonuses, company cars and etc.
These options need to be agreed with both the employer and the employee. If an employer changes the conditions of an employees employment or force them to agree to do so, they will be able to take action against this employer.
Coronavirus, Redundancies and The Role Businesses Play
There is no doubt that the Coronavirus pandemic and the restrictions placed by the Government have had a massive impact upon businesses, especially those small business owners. Where they cannot afford to pay rent, utility bills as well as employees wages, just to make a few take away coffees a day. Especially on weekends, where they must pay penalty rates up to two times the award rate. These small businesses are suffering at the hands of these restrictions.
However, how about those extremely wealthy billion dollar companies who have no legal or moral obligation to keep their employees employed. Where despite having the financial means to do so, after decades of making money. At the first opportunity they see to reduce their payroll, they do so and claim it is a “genuine redundancy”.
In recent news, there has been news of various billion dollar companies who have announced job losses so far, including the following:
• Virgin: After being placed in voluntary administration back in March, the company had to stand down over 80% of its employees. Where these employees have not been told when they can return, if ever.
• Qantas: In June, the company announced they would permanently cut more than 6,000 jobs due to the strain the coronavirus pandemic has had on the company. The jobs being cut include office roles, cabin crew, engineering roles and pilots. This announcement came as a shock to the public, especially after Virgin were placed into voluntary administration and leaving Australian’s with no choice but to fly with Qantas.
• Flight Centre: Due to the closure of international borders and the Government restrictions, Flight Centre have temporarily stood down or making redundant 3,800 Australian sales and support staff. Although the company also made those staff working offshore redundant, how many remain? Did they decide to cut the work of hard-working Australian employees before those cheaper, off-shore employees?
• Woolworths: In June, Woolworths made the announcement that the automation of its warehouse would eliminate about 700 jobs in both Sydney and Melbourne. How is it that a company who made money off Australian’s stock piling toilet paper earlier in the year are now cutting jobs of Australian’s during a pandemic when they need it most.
• Myer: Last month, Myer announced that they were cutting 90 jobs in head office whilst they try and get through the coronavirus sales downturn.
• Target: The Wesfarmers group announced in May that they would be turning up to 167 Target and Target Country stores into Kmart, or just shut down. Where subsequently, they would be reducing up to 1,300 roles over the next year. There has been discussion for years regarding the triumph of Kmart over Target, however why is it now during a pandemic that the group decide to shut down Target stores?
• Big Four Professional Services Firms: Recently, PwC announced they would be cutting around 400 employees from their financial advisory, support and consulting sectors. This represents around 5% of its workforce within Australia. Similarly, Deloitte announced that they would be cutting 700 from 10,000 employees in Australia, due to the Coronavirus pandemic causing a decrease in revenue and operating profit. Lastly, despite majority of KPMG’s Australian workforce agreeing to accept a 20 per cent pay cut, they further cut 200 consulting jobs.
“I have been made redundant before and it is a terrible blow; redundant is a rotten word because it makes you feel useless” – Billy Connolly.
Under any circumstance, being made redundant is never ideal for any employee. Where employees spend years, even decades working at a company. They work hard and give these companies their all. Some employees even miss out on their children’s birthdays, or other important milestones in their lives as they are hardworking and dedicated to their job. Just to be told in the end they are no longer required.
The ongoing coronavirus pandemic has a destructive impact upon our economy, both domestically and internationally. Where the Governmental restrictions placed in attempt to stop the spread of the virus, has had a massive impact upon both employers and employees alike. Where companies are being forced to cut jobs, or even shut their operations overall. Although there are Government incentives, such as the JobKeeper Payment to help Australians within the workforce and support businesses affected by the economic impact the Coronavirus has. Not all employees or business owners are eligible. Thus, leaving many employers with the difficult decision to have to make certain roles within their companies redundant.
Where an employee has been made ‘genuinely redundant’, then this will be viewed as a valid reason for a dismissal. Similarly, employers are required to consult with their employees before making the decision to make a role redundant. However, sadly this is not the case for many hard-working Australian employees. Where they are not offered the opportunity to relocate, or perhaps reduce their hours. Rather, they are shown the door and left without a job during a global pandemic, with bills and a family to support.
Time and time again we see employers using factors ‘out of their control’, such as the Coronavirus, to give grounds for redundancies. This may be to push out an employee to save costs, or because they are older, injured or ill. This is not only an injustice to the Australian workforce, but just straight outrageous.
What is even more shameful are the extremely wealthy billion dollar companies who use the first opportunity they see to reduce their payroll, and claim it as a “genuine redundancy”. Yes there are small businesses who cannot afford to pay their staff penalty rates just to make a few take away coffees, due to the coronavirus restrictions. But how about those companies who have spent decades generating gross amounts of revenue and operating profit. Those who can afford to do the right thing and keep their employees on the payroll, and yet decide not to. They decide to make thousands of Australian jobs redundant, while often keeping those cheaper off-shore jobs employed. Leaving these hard working Australian’s without any means of income during a global health pandemic. Where not only will they struggle to financially support themselves and their families, but the prospect of finding a new job is unlikely. Due to the increase of unemployment.
Here at “A Whole New Approach”, we receive calls daily from employees of companies with 10 – 20 years of service. Where many of these employees are in their 50’s, feeling as though they are unlikely to be able to be re-employed, especially during a pandemic. What all these employees share is the feeling of confusion, many even blaming themselves and questioning what they did wrong?
However, the answer is nothing, they have done nothing wrong.
If you or someone you know has been made redundant from their job, due to the coronavirus there is a good chance that it may not be a genuine redundancy. Similarly, if you were made redundant due to the virus without consultation or were replaced shortly after, this is not a genuine redundancy.
Rather, it may have been an attempt for an employer to cover up the real reason for wanting to terminate this employee. Such as to cut their payroll costs, or perhaps they are discriminating against this employee upon grounds of a protected attribute such as their race, sex, age, disability, marital status or family/carer’s responsibilities. If so, this employee may be eligible for an Unfair Dismissal Application to The Fair Work Commission.
If you would like to discuss a potential unfair dismissal or unlawful termination application, or for advice please call us for a free consultation on 1800 333 666. You have nothing to loose. Please keep in mind an application of unfair dismissal must be lodged within 21 days of your dismissal.
Don’t wait until the last moment to fight for your rights as an employee, as it may be too late.
“Action is the foundational key to all success” – Pablo Picasso