One day’s notice of redundancy reasonable: FWC

Cases

One day’s notice of redundancy reasonable: FWC

A full bench of the Fair Work Commission has found a manager who was made redundant was not treated unfairly by receiving one day's notice due to circumstances where confidentiality of client data was important.

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A full bench of the Fair Work Commission has found a manager who was made redundant was not treated unfairly by receiving one day's notice due to circumstances where confidentiality of client data was important.
 

The full bench noted that employers may face various exigencies which will affect the practicability of the timing of discussions with employees.
 
It pointed out the award provision designed to ensure that discussions occur as early as practicable were intended to apply to circumstances such as those in this case — security concerns and the need to manage a global review process.

Fair — considering the particular facts — no relocation
 
The full bench examined the evidence on the possible relocation of the manager to the USA and concluded the company had acted reasonably:

"… We think Ventyx’s conduct in not giving prompt consideration to matters raised by Mr M on 2 July 2013 in respect of his interest in a number of the jobs in Atlanta USA is a relevant consideration as to whether or not the termination of his employment was harsh, unjust or unreasonable.
 
"… We turn to whether the applicant was treated harshly or unreasonably because he was not relocated internationally instead of being made redundant.
 
"… the unchallenged evidence in this matter was that the cost to relocate a staff member overseas was significant (approximately $15,000 - $30,000) and that Mr M had not indicated to the employer that he was prepared to relocate to Atlanta at his own cost.
 
"… There was further unchallenged evidence that all the recruitment processes (interviewing etc) for overseas positions took place locally (in the USA). This evidence was given by Mr S, the senior vice president global consulting, was that: ‘I don't believe it would’ve been reasonable to relocate the applicant to the Atlanta office because: There were no business reasons to relocate the applicant; the cost to relocate the applicant would have been significant (approximately $15,000); and there were local people who could fill the roles'… This evidence was unchallenged."

The full bench said redeployment was a case-by case decision, pointing to full bench decisions in Pykett  and Honeysett.
 
Confidentiality issue
 
The full bench pointed out that, unfortunately for Mr M, he was "on the bench" at the relevant time and there was no work in the pipeline for him (ie his position was redundant).
 
In this case client confidentiality was a major concern for the employer and this was considered reasonable in the circumstances:

"Mr S, the senior vice president Global Consulting, gave the following evidence:

'Due to the nature of the business that the respondent operates, in terms of the level of access to customer data and importance of protecting the integrity of the data, it was crucial that the staff involved in the process maintain absolute confidentiality about the process. This was also why the notification to all staff had to occur at the same time to avoid the risk of damage to the respondent's reputation if a staff member of his position had been, or was likely to be made redundant misappropriated customer data.'
 
The full bench said: "Employers may face various exigencies which will affect the practicability of the timing of the commencement of discussions with employees…
 
"We think the award provision to ensure that discussions occur as early as practicable is intended to apply to circumstances such as that which faced Ventyx, principally security concerns and the need to manage a global review process on a common approach. 

"… the award's consultation clause did not require the company to provide the manager with an opportunity to change its decision… The award obligation, instead, requires the employer to discuss certain prescribed matters (the introduction of the changes, the likely effects of the changes, and to consider measures to mitigate the adverse effects of such changes)…."

The bottom line: What is reasonable in the management of redundancy varies with the circumstances. Employers may have good reason for minimal notice and this can put pressure on them to act quickly – as happened in this case.


 
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