Fine and reinstatement follows sham redundancy


Fine and reinstatement follows sham redundancy

An employer that claimed financial reasons were behind the alleged redundancy of a senior employee has been fined $37,000, and the employee has been reinstated.


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An employer that claimed financial reasons were behind the alleged redundancy of a senior employee has been fined $37,000, and the employee has been reinstated.

[Full text of this case: NTEU v Royal Melbourne Institute of Technology [2013] FCA 451 (16 May 2013)]

This matter involved an adverse action claim that centred around whether the dismissal of a senior academic for redundancy was due to the exercise of workplace rights.

The employer did not satisfy the onus of proving that the reasons alleged by the employee were not the reasons for dismissal.

The circumstances suggested that other reasons (not financial ones) were relied on by the senior management person who dismissed the employee.

The matter came before Justice Gray in the Federal Court.
The youth studies and sociology professor was employed by Royal Melbourne Institute of Technology (RMIT).

The RMIT maintained that its Vice-Chancellor had made the redundancy decision and that the decision was driven by financial considerations (ie arguing that the dismissed professor’s area was running at a loss).

Justice Gray found the Vice-Chancellor failed to give clear evidence that the union (on behalf of the professor) had argued (ie there were other reasons behind the dismissal, including personal differences).

Lack of evidence — failure to record reasons for dismissal
Justice Gray stated that his finding in favour of the professor was also based on the absence of ‘any clear expression of a connection between the financial deficit in the Youth Work discipline and the choice of [the professor] as the one who should be made redundant …’
His Honour continued:
‘One of the most disturbing aspects of this case is the absence of any contemporaneous account of the reasons of Professor G [Vice-Chancellor] for deciding that Professor B should be made redundant.

Professor G justified this absence by saying that she is called upon to make many decisions every day and did not have time to record her reasons for all of them.

This is undoubtedly the case, but the decision to make a professor redundant is not an every-day one and does differ from the ordinary run of administrative decisions within a university.

The impact of the legislative provisions [340 to 361 are found in Pt 3-1 of the Fair Work Act] … is to give the recording of reasons for a decision to dismiss a person from employment a very high priority.

Anyone with a background in the discipline of industrial relations, which Professor G had, would understand the importance of recording reasons for dismissal. No such reasons were recorded.

Professor G did say that she had a discussion with Ms G in relation to the memorandum of 28 June 2011, and communicated her reasons to Ms G. Professor G was not asked to give, and did not give, any evidence as to the content of any such conversation.

Ms G was not called to give evidence at all. If the reasons given to Ms G were above-board, it is likely that evidence of the expression of them, at the time of the making of the decision to approve the memorandum of 28 June 2011, would have been given. The absence of such evidence suggests that the actual reasons given in the conversation would not have helped RMIT’s case …’
Reinstatement ordered
The court concluded:
‘Because I am proposing to order reinstatement, together with recognition of continuity of employment, I do not propose to order that RMIT pay any further compensation for damage to the reputation of Professor B. By this judgment, she will be vindicated. She will suffer no economic harm arising from any damage to reputation.’
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