Employers have no excuse for a bad redundancy: AiG

News

Employers have no excuse for a bad redundancy: AiG

Avoiding paying for redundancy decisions was a matter of following basic steps and there was not a lot of excuse for people who didn't take the time to do so or place a high enough priority or addressing redundancy properly, according to the Australian Industry Group.

WantToReadMore

Get unlimited access to all of our content.

 

Avoiding paying for redundancy decisions was a matter of following basic steps and there was not a lot of excuse for people who didn't take the time to do so or place a high enough priority or addressing redundancy properly, according to the Australian Industry Group.

AiG senior workplaces services advisor Terry Bourke told the IIR Employment Law conference in Sydney yesterday that redundancy was like an exam, and employers already knew all the questions because of previous decisions made clear by the Australian Industrial Relations Commission.

The full bench had made it clear that unless an employer had a valid reason for a redundancy, and had followed proper process by giving an employee a chance to address concerns before a redundancy decision was made, it would have to correct its mistakes.

'Don't let yourself be lulled into any false sense of security that rules applying to other unfair dismissals don't apply to redundancy,' Bourke told delegates. He warned that the lines between performance, capacity and conduct were blurred and that if the redundancy selection reflected any of these issues, an employee must have been given a warning and must be given an opportunity to address it, before the redundancy was decided.

Clearly there's no opportunity to respond when the first thing you say is - 'There's the door', Bourke said. 'It is a common mistake, but unforgivable - if for no other reason than employees deserve better.'

Opportunity to respond

Providing this opportunity could give management more information it didn't previously have, on which to base its decision, before it makes that decision. Bourke gave the example of an employee who had been selected for redundancy on the basis of attendance, as he had missed six days over the past six months.

Speaking to the employee may have alerted management to the fact that he had arranged with someone no longer with the company to take a day a month off work to take his child to hospital for cancer treatments. As it was, that employee would now have a winnable case in the AIRC and Bourke also warned that while not common, employees could be awarded compensation for stress and humiliation suffered during the course of the redundancy.

Bourke referred delegates to a decision by AIRC Commissioner Smith in the Vodafone case in which he said:

'Consultation is not perfunctory advice on what is about to happen... Consultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker... The opportunity to avoid or mitigate the effects of a termination can not be underestimated by those who wield power over those and their families who will be the subject of the exercise of that power.'

'If not you'll find the courts, particularly the AIRC, will make you undo what you have done,' Bourke said, adding that this could mean reinstating a worker to a position that was no longer there. Only in situations where for example a whole plant was closing was following correct process not as likely to be an issue, he said.

In having regard to whether a termination was unfair, the AIRC must pay attention to any matter it thinks relevant, and 'the Commission does consider employee treatment relevant', Bourke said.

When it came to process, Bourke said he encouraged employers to consult with unions as soon as it became apparent redundancies would be made, to seek volunteers for redundancy, and to look as widely as possible. Bourke said those left after the redundancy would also need reassurance.

The importance of selection

On the matter of selection, he outlined a sample selection criteria matrix in which, while the categories may be vague, the criteria were as action-based as possible and should reflect the business going forward. This was so that they could be objective, and that different competent assessors should be able to make the same decision.

He commented that the immediate supervisor should make the initial selection and thus that training of supervisors was vital in ensuring a fair process. He said one of AiG's clients had run into trouble when a manager ignored process and decided to select redundancies on the basis of who had vetoed the union line, despite a clearly set out procedure. The company was ordered to reinstate 200 miners, in what Bourke said would have cost $25 million.

'Supervisors are a critical link. Whether or not your supervisors are trained for the task is more than a little thing, believe you me.'

If selections were being based on subjective criteria, he advised using more than one assessor, to miss extreme responses. Bourke advised using a rating system which scored employees (3 points) for consistently exceeding expectations, (2 points) for normally meeting expectations and (0 points) for needing improvement. He said this method allowed the least possibility for markers to bring in their personal views. And weighting criteria was quite legitimate, he said.

Finally, Bourke advised against putting in records which could be seen as discriminatory - issues like union activism or WorkCover claims, as this would mean the employer would lose the capacity to compare like with like.

Post details