Two jobs into one: redundancy or dismissal?

Cases

Two jobs into one: redundancy or dismissal?

An employee was legitimately made redundant when two management positions were consolidated into one more senior role, the Fair Work Commission has ruled.

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An employee was legitimately made redundant when two management positions were consolidated into one more senior role, the Fair Work Commission has ruled.

The employee argued he was unfairly dismissed and should have been offered the new job as he was capable of performing it. The employer had to prove he was not suited to the job and that redeployment to another position was not possible.

Facts of case


The worker was employed as a mechanical maintenance manager for 10 years at a chemical manufacturing company.
 
The employer decided to restructure its business in order to cut costs and reduce staff numbers by about 10 per cent. One change was to combine two maintenance manager roles into one more senior position to be called 'maintenance and reliability lead manager'.

It determined the new job required someone with tertiary qualifications and a formal training and engineering qualification, neither of which the employee had. It advertised the position offering a considerably higher salary and ultimately took several months to fill it.

The employer explained the nature and purpose of the restructure to staff and told the employee he would be made redundant in about two months. Meanwhile, the employee in the other former job resigned.

Dismissal or genuine redundancy?


The employee argued he had been unfairly dismissed. He claimed it was not a genuine redundancy but a confected opportunity to get rid of him.

His case was as follows:
  • His job still needed to be performed.
  • There was no genuine change in the employer’s operational requirements.
  • The new job was fundamentally a replacement of his old one, and he was capable of performing it.
  • The employer did not consult with him about the restructure or his proposed redundancy.
  • It was feasible to redeploy him elsewhere in the business.
  • He was targeted because of previous incidents that resulted in the employer issuing him a formal warning two years earlier. For that reason, he did not apply for the new job because he thought he would be wasting his time.
  • When his solicitor enquired about the nature of his termination of employment, the employer did not respond.
The employer argued there had been a genuine redundancy for the following reasons:
  • The new job was a more senior one, for which the employee lacked the necessary qualifications.
  • It estimated that less than 25 per cent of the employee’s former duties were contained in the new job. Many of the skills were not transferrable between the old and new jobs. For example, the new job required leadership and cross-functional skills, but the old one was mainly task-oriented.
  • The employee had not applied for the new job. There was no other job in the organisation that he could be redeployed to, although options had been explored.
  • The 10-week gap between notification and implementation of his redundancy gave him ample opportunity to discuss the situation with management, and he did so.

Key issue: was it a genuinely new job?


The Fair Work Commission determined that, while some aspects of the employee’s former job were incorporated into the new one (but at most about 25 per cent), the two jobs were essentially very different. The new job was a higher-level, more strategic one that required extra qualifications and experience that the employee lacked. 

A genuine redundancy could still occur if the duties to be performed did not change and were still required, but the way in which work was organised did change – eg duties distributed among other jobs.

The commission added that redeployment was impracticable, because the employer had no position remaining that the employee was suitable for. It had not taken his previous warning into account, because there had been earlier (and cheaper) opportunities to make the employee redundant if that was what it wanted to achieve.

For these reasons, there had been a genuine redundancy and the employee could not claim unfair dismissal.

What this means for employers


When multiple jobs are consolidated into a smaller number during a restructure, and/or the duties of “redundant” jobs are redistributed among other jobs, employers need to be able to demonstratet the new jobs are genuinely different from the previous ones, eg different skills or qualifications required.

If it is not clear this is the case, employees whose jobs are being abolished should have the opportunity to apply for the new jobs. Possible redeployment to other jobs in the organisation should also be thoroughly investigated. Otherwise, there is a risk that a “redundancy” will become a “dismissal”.

Rubesa v Ixom Operations P/L t/a Ixom 
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