CONSIDERING REDUNDANCY IN A COVID-19 WORLD — LESSONS FROM THE FAIR WORK COMMISSION

What is Redundancy?

Genuine Redundancy under the Fair Work Act 2009 (Cth)

  • the employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the enterprise;
  • the employer complies with any obligation in the relevant modern award to consult with the employee regarding a redundancy; and
  • it would not be reasonable to redeploy the person elsewhere within the employer’s enterprise or the enterprise of an associated entity of the employer.

Where the job is no longer required due to changes in operational requirements

Redeployment

  • the employer’s enterprise; or
  • the enterprise of an associated entity of the employer.
  • consider whether an employee can be reasonably redeployed; and
  • make all genuine attempts to redeploy the employee, within the company, or within an associated entity.

Reasonable in the circumstances

  • 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.

The job must be suitable

  • the location of the job, and
  • the level of remuneration.

Consultation Obligations

  • engage in consultation with the employee as soon as practicable;
  • provide the employee with a real opportunity to provide his or her views and opinions on the proposed decision and the impact of the proposed change (including any impact in relation to his or her family or carer responsibilities);
  • provide comprehensive information to the employee about the proposed decision and make sure it is in writing;
  • remain open to suggestions;
  • keep records of conversations involving consultation;
  • give prompt consideration to any matters raised by the employee; and
  • if deciding to implement the original decision to introduce changes or to terminate the employee’s position on the basis of a redundancy, explain the rationale for this to the employee and provide the decision to him or her in writing as soon as practicable.
  • proceedings for breaches of an applicable modern award and the imposition of substantial civil penalties, being $13,320 per breach for individuals and $66,600 per breach for corporations;
  • substantial legal costs; and
  • a greater exposure to successful unfair dismissal claims.

DECISIONS FROM THE COMMISSION: COVID-19 DOES NOT ABSOLVE AN EMPLOYER OF ITS LEGAL OBLIGATIONS, SPECIFICALLY ITS OBLIGATION TO ENGAGE IN GENUINE CONSULTATION

  1. Aimal v Battery Energy Power Solutions [2020] FWC 3034 (10 June 2020)
  1. Australian Services Union v Auscript Australasia Pty Ltd [2020] FWC 1821
  1. Freebairn v TJL Business Advisors and Accountants [2020] FWC 3915

DECISIONS FROM THE COMMISSION: THE EMPLOYEE’S ROLE IS NO LONGER REQUIRED BUT THE BUSINESS CANNOT AFFORD TO PAY REDUNDANCY PAY; WHAT DO I DO?

DECISION FROM THE COMMISSION: CAN AN EMPLOYER REDUCE AN EMPLOYEE’S REDUNDANCY PAY ON THE BASIS OF THE EMPLOYEE OBTAINING OTHER ACCEPTABLE EMPLOYMENT

  • the employee’s job security was less secure because the new role required her to serve a three month probationary period;
  • the scope of duties which the employee could be required to perform was reduced; and
  • the employee’s title was changed to one suggesting reduced seniority.

DECISION FROM THE FEDERAL COURT: IS AN EMPLOYEE STILL ENTITLED TO REDUNDANCY PAY WHEN THE EMPLOYER CHANGES THE EMPLOYMENT CONDITIONS BUT THE EMPLOYEE CONTINUES WORKING FOR THE EMPLOYER

  • there was a wrongful dismissal constituted by the employer’s repudiation of the employment contract, which brought the full-time contract of employment to an end;
  • the relationship in which the employee entered after she accepted the repudiation was a fundamentally different relationship (part-time employment) from the relationship the parties previously enjoyed (full-time employment); and
  • the employee was no longer a full-time employee but a part-time employee, performing a fraction of the work she formerly undertook for a fraction of the remuneration she formerly received.

CONTACT MURFETT LEGAL FOR ASSISTANCE

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Aiden Dallas

Aiden Dallas

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As a freelance copywriter I love the flexibility of working anywhere across the globe and all the opportunities that come with it.