'Redundancy situation' may apply even though position is not redundant

Cases

'Redundancy situation' may apply even though position is not redundant

Source: Australian Business Ltd Can an employer wishing to reduce the number of staff performing a particular job make some of those staff redundant even if the work must still be performed? Yes, provided the industrial agreement is worded properly, according to a finding last week by the Federal Court.

WantToReadMore

Get unlimited access to all of our content.

Source: Australian Business Ltd

 

Can an employer wishing to reduce the number of staff performing a particular job make some of those staff redundant even if the work must still be performed? Yes, provided the industrial agreement is worded properly, according to a finding last week by the Federal Court. 

The relevant AWA was found by the court to provide for a 'redundancy situation' that legitimately affected the employee rather than providing for redundancy of his particular position in his particular location.

As a result the employee could be made redundant when the Commonwealth bank reduced the number of employees carrying out that role in a number of branches from 17 to 13. The particular branch where the employee worked was not closed. 

The wording of the instrument determining the redundancy entitlements of employees is critical in determining the precise rights and obligations of employees. In this case the AWA was found to favour the employer's argument despite the fact that, on general principles, the employee could argue that redundancy had occurred.

See: Carrigg v Commonwealth Bank of Australia [2002] FCA 813, (27 June 2002).

Background

In early 2001 the employee was advised that he was surplus to the Bank's requirements. Two to three weeks later a former employee of Colonial started to undertake the duties of branch manager at the Pymble branch. The employee subsequently undertook relieving work at various bank branches. In late March 2001 he was invited to fill out a form to indicate whether or not he would accept voluntary redundancy. The employee made it clear he was not interested in taking a redundancy; he preferred redeployment.

After reviewing potentially suitable positions, the Bank advised the employee that there were no current vacancies to which he could be appointed. He continued to work in a relieving capacity until he was made redundant in February 2002.

The AWA provided:

'Redundancy and Redeployment

A redundancy situation refers to a situation where the Bank no longer requires to have a job or a task performed and having reviewed all other alternatives declares you redundant. …'

The critical question was what was encompassed by the phrase 'where the Bank no longer requires a job or task performed' in the Statement of Conditions. That is, in the circumstances of this case, do the words 'a job or task' mean the precise job or task performed by the employee (ie branch manager, Pymble) or do they have a more general ambit?

Findings

Federal Court Justice Branson dismissed the employee's application:

'Having regard to the way in which the Statement of Conditions is worded generally, it seems to me that if the framers of the document had intended to limit a "redundancy situation" to the circumstances in which the job or task of the employee party to the AWA was no longer required to be performed, the phrase "where the Bank no longer requires your job or the task performed by you performed" or a similar phrase would have been used.

'I am not persuaded that clause 14 [of the Statement of Conditions] is limited in its operation to a circumstance in which the Bank no longer requires to have the very job or task performed by the employee party to the AWA performed. Nonetheless, common sense dictates that the job or task that the Bank no longer requires to have performed must be a job or task with some sensible connection with the duties of that employee.

'The appropriate means of implementing the above decision so far as the 13 considered most meritorious was concerned would in the case of each particular branch manager depend upon the terms of his or her employment by the Bank. In some cases no change to employment terms and conditions might be necessary, in others the terms and conditions of employment might allow a direction to perform duties at a fresh location, in yet others, a fresh contract of employment might need to be offered.'

 

 

Post details