When is a redundancy genuine?: FWC cases

Cases

When is a redundancy genuine?: FWC cases

A number of recent cases decided by the FWC highlight the factors considered by courts and tribunals in assessing whether a redundancy is genuine.

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A number of recent cases decided by the Fair Work Commission (FWC) highlight the factors considered by courts and tribunals in assessing whether a redundancy is genuine.  
 
 
Events after redundancy irrelevant
 
A steelworker submitted that another employee was now performing the duties he performed and that respondent has employed further employees since making his position redundant.
 
This was an application for an extension of time to bring an unfair dismissal claim, but the essential question decided was whether an alleged redundancy was genuine.
 
The employer submitted that assessment of employees was completed against core values and work attributes and the applicant received the second-lowest score. The respondent subsequently made two employees redundant.
 
The FWC found that later actions by the employer in response to changed circumstances were not connected to the issue of whether the applicant’s position existed at the time of redundancy.
 
The assessment matrix did not assist in the decision of whether there was a genuine redundancy; it was found that the decision to dismiss the applicant was due to operational requirements. The Commission concluded the employer had made sufficient attempts at redeployment, so the dismissal was due to genuine redundancy.
 
Although time would have been extended, the FWC found against the applicant on substantive grounds and dismissed the application.
 
 
The FWC found there had been a lack of consultation bythe respondent employer.
 
A worker at a not-for-profit organisation, who had been performing two roles since 2006, was called to a meeting and advised that both roles had become redundant as a result of a review/restructure and she was not qualified for any new roles.
 
She was given the option of working through a five-week notice period to try and secure an alternative role or take a redundancy package immediately or at any time during notice period. The worker was unaccompanied at the meeting and elected the next day to take a redundancy package.
 
She lodged an unfair dismissal application one week later, alleging that termination of her employment was harsh, unjust or unreasonable. The employer raised two jurisdictional objections: genuine redundancy and no termination at initiative of respondent.
 
The applicant submitted her termination was not a genuine redundancy as there was "a complete absence of consultation" and it would have been reasonable to redeploy her. She also submitted there was no resignation, since the employer informed her it was her choice whether she worked out the notice period or was paid in lieu of notice.
 
The employer argued the worker had been consulted over an approximately six-month period in relation to the restructure and at the time of termination there were no roles to which she could be reasonably redeployed. It was also argued the submitted termination was not at their initiative, since the worker had chosen to not work out her notice period.
 
The Commission found the principle of ‘no termination at initiative of respondent’ was simply not sustainable on any basis. Regarding jurisdictional objection for genuine redundancy, the Commission found the employer hadn't followed consultation obligations under agreement and the action was therefore not a genuine redundancy as defined in Fair Work Act.
 
The Commission was not satisfied there was a job, a position or other work to which applicant could have been redeployed, finding that the termination was harsh, unjust and unreasonable.
 
Given the lack of redeployment opportunities, reinstatement was not considered appropriate and payment of compensation of $5,632 less applicable tax (equivalent to four  weeks’ salary), plus 9.25% superannuation was ordered.
 
Redundancies despite work to be done
 
In the case of an appeal by a taxi company against an unfair dismissal decision, the full bench of the FWC overturned the original decision and declared a genuine redundancy, applying the approach in Ulan Coal Mines Ltd.
 
The full bench held it was in the public interest to grant permission to appeal and held that the Commissioner erred by taking the view that a volume of duties remained to be carried out by the employee. 
 
The determination of the matter under s389(2) was referred to an alternative Commission member.
 
 
In this application for an unfair dismissal remedy, the employer objected on the basis that the termination was a genuine redundancy and the applicant was not a person protected from unfair dismissal remedy as he was not covered by a modern award and earned above the high income threshold.
 
The applicant, meanwhile, claimed the position he held still needed to be performed, and that his employer did not consult him about redundancy and it would have been reasonable to redeploy him.
 
A restructure at IT firm IBM involved eliminating some roles and reassigning duties and responsibilities. Management representatives met with the applicant on 27 May 2013 to discuss redundancy.
 
The applicant was informed his employment would be terminated if he did not secure an ongoing role with the respondent by 28 June 2013. He was advised to look for alternative opportunities immediately.
 
The company's recruitment tool was made available, along with an offer to set up a profile for the employee. He did not set up a profile until late June. He then applied for three positions, but was not successful.
 
The Commission found that IBM's grounds for not the selecting applicant were rational and reasonable. It was clear the company no longer required the applicant’s job to be performed by anyone due to changes in operational requirements.
 
The company had consulted the applicant and advised him how to source and identify other positions. The Commission found that even if the applicant was covered by a modern award, the company had complied with award requirements.
 
Even if the applicant was a person protected from unfair dismissal, he was not unfairly dismissed, since the dismissal was a genuine redundancy.
 
 
The bottom line: The question of whether a dismissal is a genuine redundancy is an important one for employers as a genuine redundancy is a defence against an unfair dismissal action.
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