Unfair Dismissals Australia

Redundancy

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Important Information

Our Advice to All Hardworking Australians
Some Employers indicate now that we are making you redundant, can you resign, under no circumstances do you resign, get advice first. Redundancy entitlements can be allot of money, explore your options.

Redundancy & Unfair Dismissal

An unfair dismissal application cannot be made if the dismissal was a case of genuine redundancy. A dismissal is a case of genuine redundancy when the employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise, and the employer has complied with any obligation imposed by an applicable modern award or enterprise agreement to consult about the redundancy.

A dismissal is NOT a case of genuine redundancy if it would have been reasonable in all of the circumstances to redeploy the person within the employer’s enterprise, or the enterprise of an associated entity of the employer. If an employer believes that an employee’s dismissal was a genuine redundancy, and the employee has made an application for an unfair dismissal remedy, the employer may make a jurisdictional objection to that application.

If an employer can prove that the requirements of s.389 of the Fair Work Act 2009 (Cth) have been met, the Commission will have no jurisdiction to hear the unfair dismissal claim. However, if the requirements of s.389 of the Fair Work Act 2009 (Cth) have not been met, the Commission must determine if the dismissal was unfair.

If an employer has chosen to make you redundant for a prohibited reason, such as because you’re pregnant, this unlawful selection process may be relevant to a claim under the general protections provisions of the Fair Work Act. In this case you need to contact us as soon as possible.

Has your employer met their obligations under s.389 of the Fair Work Act 2009 (Cth)?

In determining whether your redundancy is genuine, the first question you must ask yourself is whether or not your job is still available. If the answer is no, then it is arguable that because your role no longer exists or is no longer required by the Company, your redundancy is likely to be genuine. If your answer is yes and your role has been replaced due to a reshuffle of staff or the Company’s need to downsize, depending on the other factors under s.389 of the Fair Work Act 2009 (Cth), your redundancy may not be genuine.

The second element that the Company must satisfy in order for a redundancy to be deemed genuine, is the obligation to consult with employees about the redundancy. The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements (which they often do) to consult about redundancy.

The third element that the Company must satisfy is whether it would have been reasonable in all of the circumstances for the person to be redeployed within the employer’s enterprise, or the enterprise of an associated entity of the employer. If the Company does not consult with an employee, then it is arguably that the reasonable steps have not been taken to redeploy the employee as no discussion took place and so no alternatives were assessed.

If the Company did consult, then the Fair Work Commission will look at the effectiveness of this consultation and whether the Company took into account various factors when assessing possible redeployment.

The process for selecting employees for redundancy is not relevant to whether the dismissal was a genuine redundancy or whether there was a valid reason for dismissal based on capacity. It is within the Company’s rights to run their business as they please and so it is at their discretion who they chose to make redundant. However, if an employer has chosen to make you redundant for a prohibited reason, such as because you’re pregnant, this unlawful selection process may be relevant to a claim under the general protections provisions of the Fair Work Act or under state or federal anti-discrimination laws.

Your approach to an unfair dismissal claim after being made redundant is extremely important and it's strongly advised you call us as soon as possible for professional support.

Is there an obligation to consult?

In determining whether the Company consulted with an employee, we must first establish whether there is an obligation to consult. These obligations only arise when a modern award or enterprise agreement contains this requirement.

A modern award applies to an employee when it covers the employee is in operation, and there is no provision in the Fair Work Act 2009 (Cth) which provides or has the effect that the modern award does not apply. A modern award does NOT apply to an employee at a time when the employee is a high income employee. As a result, modern award consultation obligations do not apply to high income employees. However, this does not affect eligibility for an unfair dismissal remedy.

An enterprise agreement applies to an employee when it: covers the employee is in operation, and there is no provision in the Fair Work Act 2009 (Cth) which provides or has the effect that the modern award does not apply.

Unfortunately, if there is no modern award or enterprise agreement that applies, there is no legislative requirement to consult about the redundancy before a decision is made to make an employee redundant.

If an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy, the redundancy will not be deemed genuine. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy. If an employer was obliged to consult and fails to do so, there cannot be a genuine redundancy.

When assessing whether criteria in s.389 of the Fair Work Act 2009 (Cth) which have not been met, such as the requirement to consult, can be taken into account in the Fair Work Commission’s consideration as to whether the dismissal was harsh, unjust or unreasonable as part of s.387(h) of the Fair Work Act 2009 (Cth), being ‘any other matters that the Commission considers relevant’.

A failure to consult with employees about redundancy can mean that the Commission may find that it was not a case of genuine redundancy. However, in circumstances where 'consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change', the failure to consult may not be so strongly considered by the Commission in determining whether it was an unfair dismissal.

What is a consultation?

Consultations must be genuine and not perfunctory. They should be meaningful and engaged in before an irreversible decision to terminate has been made. The purpose of a consultation is to facilitate change where that is necessary, but to do that in a humane way which also takes into account and derives benefit from an interchange between worker and manager.

Consultations can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. Any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at the formative stage of proposals – before the mind of the executive becomes unduly fixed.

Consideration of Redeployment

Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. In determining whether redeployment was reasonable a number of matters may be relevant, including whether there exists a job or a position or other work to which the employee can be redeployed, the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, and the location of the job in relation to the employee’s residence and the remuneration (pay and entitlements) which is offered.

An employer must consider whether it is reasonable to redeploy an employee to an associated entity. The degree of managerial integration between the different entities is likely to be a relevant consideration.

The Fair Work Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must be an appropriate evidentiary basis for such a finding. Evidence in relation to whether there was a job or a position or other work would usually include canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee.

The alternative job must be suitable to the employee in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or within a reasonable period of retraining. When assessing suitability, the Fair Work Commission will also look at additional factors such as the location of the job and the level of remuneration. If an employer has other positions available, even at a lower level, that the redundant employee has the skills to perform, the employer should not presume that the employee will refuse the position. An employee may well be prepared to consider a role with less responsibility and have no objection to the location of the role being different to the current one and accept less remuneration. A finding, based on the evidence of the employee, may be open to the Commission that it would have been reasonable in all the circumstances for an employee to have been redeployed into a vacancy with lower income and less responsibility.

Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other employees, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. Subjecting an employee to a competitive recruitment process for an advertised vacancy in an associated entity may lead to the conclusion that the employee was not genuinely made redundant.

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