Overseas redeployment no alternative to redundancy

Cases

Overseas redeployment no alternative to redundancy

Multinational companies should be reassured that they will not have to consider the option of redeploying employees to an overseas branch instead of making them redundant, according to a recent FWC decision.

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Multinational companies should be reassured that they will not have to consider the option of redeploying employees to an overseas branch instead of making them redundant, according to a recent decision of the Fair Work Commission. The Commission found that this was not a reasonable option for the employer and rejected an employee’s claim for unfair dismissal.
 
 
The employee was a Senior Designer at an engineering company that had experienced a severe downturn of business in Australia. The company made his position redundant and retrenched him, but he argued that he could have been redeployed in an overseas branch of the company, claiming that the Fair Work Act’s definition of ‘associated entity of the employer’ (s389(2)(b)) covered that option.
 
No reasonable expectation
 
The Commission held that the employee could not reasonably expect that such a redeployment would occur. Apart from the fact that similar adverse business conditions were affecting the overseas branches, the employer had never indicated that it had the facility to redeploy redundant employees overseas. It did have a history of allowing employees to apply for overseas positions and, if successful, resign from their Australian jobs (instead of being retrenched) and transfer overseas at their own expense. There was no evidence that the multinational corporation had central policies that governed overseas transfers; each subsidiary made its own recruitment and transfer arrangements.
 
Factors to consider
 
The Commission added that whether overseas redeployment would be a reasonable option in other cases would be influenced by its cost to the employer in each case. Other relevant factors would include comparisons of employment terms and conditions, remuneration, seniority, job security, career pathways, preservation of service entitlements, inconveniences, distance between home and work, workplace health and safety risks, impact on family responsibilities and impact on the contract of employment. For example, moving to a lower-paid job would not generally be ‘redeployment’, even if the employee requested the transfer.
 
Because the Commission found that the employee’s redundancy was genuine, he was ineligible to lodge a claim of unfair dismissal.
 
Message: In general, overseas redeployment will not be a reasonable option for employers in redundancy situations, according to the Commission.
 
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