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Employers must consult about redundancies

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Worker denied redundancy consultation wins $16K

A Brisbane worker who was not consulted about his redundancy has won an unfair dismissal payout of over $16,000. The worker’s employer had told him he was made redundant via a voicemail message, did not provide a warning and failed to consider redeployment.

This recent Fair Work Commission unfair dismissal case – Mr Jason Nuttall v The Trustee For Bm Supplies Unit Trust [2024] – underscores how some employers flout the rules around redundancies. And it highlights the rights that many workers may not know they have when they are being considered for redundancy.

In this article, we look at the events of this case and another where an employer skipped the consultation process because they felt it would not have made a difference.

What is the law around redundancy consultations?

The Fair Work Act 2009 does not require an employer to perform a redundancy consultation. Rather, such a requirement is often outlined in an employee’s modern award or enterprise agreement. Most Australian workers are covered by an award or enterprise agreement. If you are not sure if you are covered, make sure to check your employment contract. And also check if your award or enterprise agreement requires your employer to conduct a consultation.

If an employer fails to perform a consultation in line with the employee’s award or enterprise agreement, this means that it has not fulfilled legal obligations under those instruments. This could therefore make the dismissal an ingenuine redundancy. If the employee challenges their employer with an unfair dismissal claim, they could be awarded financial compensation by the Fair Work Commission.

A consultation must be undertaken prior to the employee being made redundant. They must conduct the consultation with genuine intent and not merely in passing to just “tick the boxes.”  

“The purpose of a consultation clause 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,”

the Fair Work Commission has stated.
Received a letter of redundancy. This is not a consultative process.

What does a redundancy consultation look like?

A consultation generally first involves the employer informing the employee of the proposed alteration of their position. They will typically provide details about the proposed alteration and the predicted effects it will have on the employee’s position. This can be done verbally and informally.

In many cases, an employer will then set up a formal consultation meeting to discuss the proposed alteration and hear feedback from the employee. They should provide more details about the possible redundancy and outline ways to avoid or minimise its impact on the employee.

It is at this meeting that the employee can suggest ways that may allow them to keep their job, which the employer can consider prior to making a decision. The employer is also generally obligated to propose redeployment options for the employee within the business or an associated entity. The employer is obliged to genuinely consider options for redeployment and any suggestions or feedback provided by the employee.

If after this meeting the employer decides to make the employee redundant, they should inform them in writing and provide information about any payments.

Fired-sign-on-a-desk.
Many employers mask a dismissal as a redundancy so they don’t have to go through what may be a long process. It’s easier to throw a few dollars your way and get rid of you. There is a strict 21 days to challenge your dismissal

Worker denied redundancy consultation wins $16K

Jason Nuttall began working for milk delivery company The Trustee for Bm Supplies Unit Trust (hereafter the employer) in November 2020. He was employed as a full-time truck driver for the Brisbane-based business. On a Saturday afternoon in June 2023, he was left a voicemail from his boss.

He was told that his employer’s business was to be acquired by another company and that his job was surplus to requirements. He was also told that his entitlements would be paid to him. Feeling that his was not a case of genuine redundancy, Mr Nuttall lodged an unfair dismissal with the Fair Work Commission.

Truck driver allegedly said he’d “make life harder” for customer

Mr Nuttall argued to the Fair Work Commission that there had not been a valid reason for his sacking. However, his employer argued that there was a valid reason as Mr Nuttall had been subject to several complaints.

The company alleged he had exhibited poor customer service and was unable to perform his role. It also alleged that Mr Nuttall had engaged in assault and sexual harassment while at work. The employer provided the Fair Work Commission with emails to substantiate its claims.

One email alleged that when Mr Nuttall was requested to arrive earlier, he had refused. And when he did so, he told the customer that he would “make life harder” for them if they complained. Another email from 22 November 2022 described issues with Mr Nuttall’s delivery times at a state high school tuckshop. These delays were attributed to his prolonged periods spent in the truck.

Middle-mananger-with-his-belongs-leaving-the-company.-Employers-must-consult-abou- redundancies.
Middle manager who was working long hours is suddenly told they don’t need him any more. He has no idea why and knows its dodgy.

“Disrespectful and discourteous”: Fair Work Commission decides

Mr Nuttall’s unfair dismissal claim proceeded to a formal hearing in April 2024. The Fair Work Commission accepted that the employer “had a genuine reason for the redundancy.” However, it did not honour its legal obligations to perform a consultation with Mr Nuttall.

The employer also failed to provide any payment in lieu of notice or any redundancy payments at all. It also did not inform Mr Nuttall of his dismissal in writing. “Although I acknowledge it would not have changed the outcome, the Applicant was entitled to have had his dismissal handled lawfully,” the Fair Work Commission said.

The commission added that the way in which Mr Nuttall was sacked was “disrespectful and discourteous.” As the employer did not conduct a consultation with Mr Nuttall, his dismissal was not deemed a genuine redundancy.

Fair Work brands allegations “hearsay”

Turning to the employer’s allegations that Mr Nuttall had been subject to numerous complaints, the Fair Work Commission found in the latter’s favour. It said that the allegations “largely amount[ed] to hearsay” and lacked probative value. It stated that many of the complaints were vague, lacked detail or were not directly attributed to Mr Nuttall.

The commission noted the importance of timely and transparent management of such complaints, which the employer failed to do. It noted that the issues cited by the employer were not raised with Mr Nuttall at the time of dismissal. The Fair Work Commission therefore concluded there was no valid reason for Mr Nuttal’s termination.

Older-female-employee-made-redundant.-She-is-happy-to-be-out-of-there.
Older female employee made redundant. She is happy to be out of there. You can at any time negotate a exit package. There are minimum standards under the NES standards in the Fair Work Act. However they is no maximum (subject to taxation rules). Make sure where you can to get a good deal.

Procedural deficiencies found

The commission found significant procedural deficiencies in the dismissal process. Mr Nuttall was not given a chance to discuss his dismissal or have a support person present. Additionally, there were no prior warnings about unsatisfactory performance.

The Fair Work Commission noted that a proper warning must identify specific performance issues. And that it must make clear that employment is at risk if these issues are not addressed.

Truck driver wins big at Fair Work Commission

Given these findings, the Fair Work Commission determined that the sacking was harsh, unjust and unreasonable. It ordered the employer to pay Mr Nuttall $16,380 plus superannuation of 10.5 per cent. The employer also had to pay $530 for his “upskilling” to attain a heavy vehicle licence, which “enabled him to find new employment.”

Employer who skipped redundancy consultation loses at Fair Work Commission

Another recent Fair Work Commission unfair dismissal case that involved an employee who was not consulted about their redundancy is Rebecca Ringuet v Bioworx Pty Ltd [2024]. Ms Ringuet began working for Bioworx as an admin assistant in January 2022 and was made surplus to requirements in July 2023.

The crux of the dispute revolved around whether her sacking constituted a genuine redundancy. In her unfair dismissal claim, Ms Ringuet argued that the company failed to comply with the consultation requirements outlined in her award; the Clerks – Private Sector Award 2010.

Employers-must-consult-about-redundancies.
Employers must consult about redundancies. You have to pick yourself off the ground and move on. It’s easy for me to say and hard to do, but its the truth.

The redundancy and jurisdictional objection

Bioworx contended that the redundancy was legitimate due to an economic downturn that significantly impacted customer sales and revenue over the previous 12 months. The company provided evidence of this downturn, emphasising that it could no longer sustain its current staffing levels.

This downturn was acknowledged by Ms Ringuet, who did not dispute the financial challenges faced by the company. However, she argued that the redundancy was not genuine. This was because she believed the company failed to adhere to the consultation obligations specified in her award.

Clerks Award redundancy consultation requirements

The consultation provisions in the Clerks Award mandate that an employer must notify and discuss major workplace changes with affected employees and their representatives. This includes providing written information about the nature and expected effects of the changes and discussing measures to mitigate adverse effects. The employer must also consider any matters raised by employees during these discussions.

Hearing and evidence presented

At the hearing, the Fair Work Commission sought to determine if the redundancy process adhered to the procedural fairness required by the Clerks Award. It accepted that Bioworx had not provided the required written notice to Ms Ringuet. Also, that it had not engaged in the mandated discussions with Ms Ringuet.

Bioworx, a small business with only nine employees, argued it lacked the internal human resources expertise that might have facilitated a more thorough consultation process. Despite this, the company argued that the consultation process would not have altered the outcome. This was because there were no alternative positions available within the company for redeployment.

Employee-looking-for-another-job-after-being-made-redundant.
Start looking for another job, the moment the employer starts talking about redundancy. Don’t wait to be dismissed at the converence of the employer. Always have a plan B.

Small Business Fair Dismissal Code considered

Bioworx also raised a jurisdictional objection based on the Small Business Fair Dismissal Code, which applies to businesses with fewer than 15 employees. This code permits dismissals based on conduct or capacity without the same level of procedural rigour required for larger businesses. However, since Ms Ringuet’s dismissal was due to operational needs rather than her conduct or capacity, the code was deemed inapplicable.

Fair Work Commission decides

The Fair Work Commission concluded that Bioworx did not meet the consultation requirements stipulated in the Clerks Award. It recognised that while the economic reasons for redundancy were valid, the procedural shortcomings were significant.

“[Ms Ringuet] should have been provided with the opportunity to be informed of the redundancy before this decision was made,”

the Fair Work Commission stated.

FWC acknowledged that Bioworx thought the consultation process was unnecessary, as there was no other position available for redeployment.“However, the redundancy process is clear in the award that the notice of consultation should have been provided in writing,” the Fair Work Commission said.

It was found that Bioworx’s failure to properly consult Ms Ringuet meant she was not given a fair opportunity to understand and respond to the redundancy decision. The failure to comply with procedure therefore made the dismissal harsh, unjust or unreasonable. Bioworx was therefore ordered to pay Ms Ringuet $1,061.44 plus super as compensation.

Unhappy-employee-leaving-the-workplace.-Employers-must-consult-about-redundancies.
We all want to be treated with respect. Feel you were not treated fairly, not paid right, get advice from us today.

Have you encountered an non genuine redundancy?

If your redundancy lacks genuine grounds or your employer failed to provide proper consultation, you may be eligible to file an unfair dismissal claim. AWNA are not lawyers. At A Whole New Approach, we specialise in assisting workers with actions through the Fair Work Commission. Any issues regarding workplace harassment, toxic workplace culture any other disputes around casual employee rights call us immediatly.

For over thirty years, we have supported more than 16,000 Australian workers across all states and territories. During a private and free consultation, we can outline the eligibility criteria and guide you through the process of making an unfair dismissal application.

Act quickly, as the Fair Work Commission requires you to file an unfair dismissal claim within 21 days.

Contact us today at 1800 333 666 for a confidential and complimentary consultation.

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