Replaced By A Cheaper Worker
In the current economic environment there is no doubt that employers are under pressure to reduce their workforce and or reduce their cost base. One of the strategies being used is to make higher paid employees redundant, (particularly shorter serving employees because the payout won’t be a lot) ie their position is no longer there, in many cases wait out the 21 days an employee can challenge the redundancy via a unfair dismissal claim or general protections application, then advertise the role at a markedly reduced salary.
This was highlighted recently in the Fair work Commission decision by Deputy President Mansini (5th June 2020) Toni Perret v Ayers Real Estate U2020/6336 when the employee only after the 21 day time to lodge a claim had expired sited their position on “seek.com.au” and “indeed.com”. It appeared the only changes was the title of the position had changed and it was indicated the “new” position will be at a reduced salary.
The Deputy President clearly could see what was going on here, indicated that it met the “exceptional circumstances” test and has allowed the unfair dismissal claim to proceed although out of time.
I saw this behaviour at the end of the mining boom, where many miners were on extraordinary wages, and mining companies were on a mission to average their payroll down. Usually as employees left or dismissed then would be replaced with cheaper workers. This time around with the worst economic conditions in anybodies life time, many companies will not wait.
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