Redundancy – case notes and guidance


Redundancy – case notes and guidance

Decisions noted here on four redundancy matters provide assistance to parties who may come before the Fair Work Commission arguing similar points or positions.


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Decisions noted here on four redundancy matters provide assistance to parties who may come before the Fair Work Commission arguing similar points or positions.

The commission deals with a consistent volume of redundancy cases – the majority are settled, but a considerable number come before it for resolution. The cases noted here are presented with points to note or guidance points being highlighted.

Compensation cap applies – unfair dismissal remedy arising from redundancy complaint

This matter was a decision on appropriate compensation, arising from unfair dismissal when a redundancy payment should have been made.

The decision at first instance was that the applicant was unfairly dismissed and appropriate remedy was compensation.

The commission (Ryan C) determined the appropriate amount of compensation as $58,835 – had the redundancy payment been made.

The compensation determined to be appropriate exceeded the compensation cap and therefore was reduced to the unfair dismissal compensation cap of $58,540 – to be taxed as ETP.

S v John Holland P/L t/a John Holland Aviation Services P/L [2014] FWC 4918 (22 July 2014) 

Employer has right to decide who cannot apply for voluntary redundancy

This was a dispute regarding an obligation to consider voluntary redundancies under the enterprise agreement; that is, it concerned an employee who expressed interest in taking redundancy which was not granted.

The commission (Drake SDP) was satisfied the employer had absolute discretion to decide what operational requirements were necessary to enable it to continue to operate as it preferred.

The employer did not have to accept a volunteer offer if, after considering all the relevant factors, accepting a voluntary redundancy offer would result in it not meeting operational requirements.

However, the employer must make the decision in the context of operational requirements and criteria set out in the relevant agreement. An offer cannot be ignored because of the expense of paying entitlements.

So, if an employee were not a proper candidate for voluntary redundancy based on criteria, that application for redundancy did not have to be accepted.

SGS Australia P/L v The Australian Workers' Union [2014] FWC 5586 (18 August 2014) 

Previous time as casuals not included in redundancy pay calculations

Five employees were made redundant and the union requested the periods of earlier casual employment be considered in calculating the amount of redundancy pay. 

The commission (Sams DP) ruled that the 20 per cent casual loading was intended to compensate for the benefits and entitlements otherwise available, including redundancy.

The agreement clause wording was unequivocal; that is, redundancy provisions only applied to permanent employees. 

Australian Municipal, Administrative, Clerical and Services Union v Fairfax Regional Media – Newcastle Newspapers (Herald) [2014] FWC 5631 (18 August 2014) 

Commission must hold conference or hearing where matter involved dispute over redundancy consultation

This was an appeal to a full bench of the FWC against a decision to dismiss an application for an unfair dismissal remedy on the ground of genuine redundancy.

The conclusion of the commissioner was that the employer had complied with the award obligation to consult about redundancy.

However, the full bench (Watson VP, McCarthy DP, McKenna C) raised an issue about the procedure adopted by the commissioner to determine the issue, and found the substantive matter was determined on the basis of material filed.

Section 397 of the Fair Work Act 2009 provides that the commission must conduct a conference or hold a hearing where a matter involves the facts in dispute. The commissioner relied on untested evidence without holding a conference or hearing.

The full bench considered the course to be adopted should ensure the provisions of the Act were followed. A full and proper consideration of factual and legal matters to be determined was required.

The appeal was allowed – the matter was remitted for determination.

Appeal by T against decision of Cloghan C of 22 May 2014 [[2014] FWC 3333] Re: Regis Resources Ltd [2014] FWCFB 5358 (29 August 2014) 

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