Redundancy: employers fail the test

Cases

Redundancy: employers fail the test

In redundancy situations employers are expected to follow proper process in order to comply with Fair Work requirements and avoid unfair dismissal litigation. Here are three cases noted where the employer failed to meet the required standards.

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In redundancy situations, employers are expected to follow proper process in order to comply with Fair Work requirements and avoid unfair dismissal litigation. Here are three cases noted where the employer failed to meet the required standards.

Duress by employer


The Fair Work Commission was satisfied the employer’s conduct amounted to duress when employees were told if they refused an offer of new employment they would be referred to administrators and would not be entitled to redundancy payments.

The tribunal noted that there were a significant proportion of long-term employees with significant entitlements.

The employer was in voluntary administration and the business was sold. Employees were offered employment by the new employer on the same terms as the current enterprise agreement, but the new contract offered to the employees included a proposed location clause that imposed unrestrained obligation on employees to move from Kogarah to Ingleburn (Sydney suburbs well separated) at the direction of the new employer.

The No Extra Claims clause in current enterprise agreement stipulated that employees could not be employed on terms other than its terms.

The commission (Drake SDP) was satisfied that the proposed location clause was an extra claim and not part of the current enterprise agreement, and employees could not be required to work in accordance with the location clause. It was not open to the new employer to set aside any term of subsisting agreement or oblige employees to enter into a new contract with different terms.

The commission was satisfied that the employer’s conduct amounted to duress. The circumstances of particular employees were to be dealt with in separate reasons for decision.

'Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers' Union (AMWU) v DL Employment P/L [2014] FWC 3877 (8 July 2014) 


No consultation and no redeployment – not genuine redundancy


This was an application for unfair dismissal remedy. The employer alleged that genuine redundancy had occurred because there was no job required to be performed by anyone due to operational changes.

However, the employer did not consult with the applicant about the redundancy in accordance with obligations under the award and the commission (Asbury DP) was unable to accept that the employer established that it would not have been reasonable to redeploy the applicant given the failure of the employer to consult with the applicant. No consideration was given by the employer to redeployment within its associated entity.

The employer failed to establish that dismissal was a genuine redundancy.

C v Metropolitan Caloundra Surf Life Saving Club Inc [2014] FWC 4565 (9 July 2014) 


Redeployment not explored – not genuine redundancy


The applicant submitted that his dismissal was not a genuine redundancy and sought compensation. The employer raised jurisdictional objection, saying it was a genuine redundancy.

The commission (Lawrence DP) was satisfied that the applicant’s position was redundant, but there was no evidence that all reasonable offers for redeployment were considered by the employer.

The commission was also satisfied that there was a position at the date of dismissal and it was reasonable for the applicant to be redeployed, so dismissal was not a genuine redundancy.

It was appropriate for parties to explore settlement, and the matter was relisted.

V v Toyota Motor Corporation Australia Ltd [2014] FWC 3764 (11 June 2014)  

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