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Replaced By A Cheaper Worker

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replaced by a cheaper worker

The current economic environment has put employers are under pressure to reduce their workforce for reasons such as reducing their cost base. Higher paid employees, especially those with a shorter service with the company are being replaced by cheaper workers. There is much lower cost to the employer for making an employee redundant who has been in employment for a shorter time. As there is 21 days for an employee to make a claim via unfair dismissal or general protections, many employers just wait the time out before advertising the role at a 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 change 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.

Being replaced by a cheaper worker is not the only discrimination to be found. If your replacement is younger, there is a chance you could claim age discrimination. This can be tough but sometimes it’s too obvious to ignore – especially if the younger person is also cheaper.

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 an employee left or was dismissed they would be replaced by a cheaper worker. This time around with the worst economic conditions in anybody’s lifetime, many companies will not wait.

Have a question, think something underhanded going on, or just want to chat, give me a call

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