Cases wrap –  redundancies


Cases wrap – redundancies

Some recent cases focusing on workplace redundancy issues are summarised here.


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Some recent cases focusing on workplace redundancy issues are summarised here.

Reinstatement for employee made redundant

Before making an employee redundant, it is incumbent upon the employer to make independent inquiries as to whether the employee is able to continue in employment on modified duties or is otherwise unfit to continue in employment.

A Full Bench of the NSW IRC upheld the employee’s appeal and ordered reinstatement.

Referring to the decision of Hill J in Mason v Electricity Commission of NSW (1995) 62 IR 436 at 441 to 442, the Full Bench noted that failure to deal with the matter in a procedurally fair way, may, in certain cases, of themselves, constitute the basis for a determination that a dismissal is harsh, unjust or unreasonable.

Further, a decision to dismiss made upon the basis of procedures which are unfair and where an innocent explanation or other appropriate explanation is reasonably available will normally constitute a firm basis for a determination that a dismissal, so effected, is harsh, unreasonable or unjust.

Here, the approach adopted by the respondent in bringing about the dismissal of the employee was grossly unfair, contrary to its own policy and had a direct bearing on whether there was a reasonable assessment of the prospect of the appellant remaining in employment.

The respondent placed sole reliance on outdated reports which were provided by the appellant for reasons unrelated to considerations of dismissal. No independent inquiries were undertaken by the respondent to ascertain whether the appellant could continue to work in some suitable alternative role or on modified duties.

Darren James Anderson v Northern Co-operative Meat Company Pty Ltd (NCMC - Butchering Pty Ltd) [2004] NSWIRComm 300 - Walton J Vice-President; Backman J; O'Neill C - 18/11/04
Consultation required before redundancy
Objective redundancy criteria crucial 
Unfair dismissal because redundancy was badly managed 

No suitable alternative employment

The employer’s claim to have obtained suitable alternative employment was not established. Consequently the attempt to deny redundancy payments to the employee failed.

An employer, by purpose and effort, may establish an opportunity which suited the employee and which crystallised as alternative employment of an acceptable kind. Evidence did not establish this had occurred in this case.

Australian Workers' Union, NSW v Great Lakes Community Resources T/as Resource Recovery [2004] NSWIRComm 327 - Harrison DP - 5/11/04
Redundancy and suitable alternative employment 

Same job, same conditions, new employer - no redundancy entitlements 

Redundancy package fair

The overall package provided to the executive employee on his redundancy was found to be fair despite the employer unilaterally varying the employment contract.

The NSW IRC found that this employer varied the terms of the applicant's employment contract and imposed a term upon his employment related to redundancy without the employee's consent. The applicant had no knowledge of the variation. The employer did this wilfully. The company determined to ensure the applicant was not consulted and was not informed when the redundancy policy applicable to him was reviewed. The Commission found this unacceptable corporate behaviour. Any variation to the employment contract should have been by agreement.

However, while the variation made denied the applicant's payout of his accrued sick leave, it also allowed for further recognition of long term employment.

The IRC rejected the assertion the non-payment of the applicant's accrued sick leave made the contract unfair. Similarly rejected were: the proposition that because the company agreed to pay to another group of employees this accrued benefit, there was an unfairness demonstrated in this contract of employment on termination; and the argument that the employer's decision not to pay out his accrued sick leave was unfair, especially in the context of allowing other benefits which recognised his years of service.

Justice Kavanagh found that the cap of 18 months salary to be a fair package given the applicant's long years of service and senior management position.

The judge also rejected the proposition that the differential between the two severance policies, that applicable to Staff employees and the other to Award employees, represented any unfairness in the particular circumstances of the applicant's contract of employment on termination.

Kenneth Ross Milburn v Capral Aluminum Ltd [2004] NSWIRComm 302 - Kavanagh J - 16/11/04
Executive's termination payments found generally fair  
Redundancy payment upheld despite contract cap  

Redundancy for WA public servant under federal agreement

An agreement covering WA public sector employees in such government departments as Agriculture, Health, Police and Emergency Services, Culture and the Arts and Justice and certain WA authorities has been brought within the federal jurisdiction.

The agreement guaranteed there would not be any compulsory redundancies and that voluntary severance packages of three weeks pay per year of service up to 52 weeks could only be offered after consultation.

Section 170LC certification of multi-business agreement, Liquor, Hospitality and Miscellaneous Union and Others and Minister for Health and Others. PR952479 - 25/10/04


Bakery franchises not common enterprise so single certified agreement refused

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