Redundancy: can we change our mind?

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Redundancy: can we change our mind?

Can you withdraw a redundancy notice and insist that the employee continues in the role? Paul Munro explains.

Can we withdraw a redundancy notice and insist that the employee continues in the role?

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Q Our company notified an employee that his position would be made redundant at the end of this month. He was given details of his payout and advised that his last working day would be 31 July.

Due to some changes in the business, we're now able to keep the employee on. We notified the employee in writing that the redundancy had been postponed and that his position would remain for the immediate future.

The employee has refused to accept the offer of continued employment and says he wants to take the redundancy pay. He has not yet accepted other employment.

Can we withdraw notice of termination and insist the employee accept the offer of continued employment?

Industrial courts and tribunals have generally determined that notice of termination of employment, once given by an employer, cannot be withdrawn, except with the agreement of an employee. The reason for this is an employee may have already obtained employment with another employer, with the result that if an employer could unilaterally withdraw notice, the employee could be bound by two concurrent contracts of employment. See Re Rodney Birrell v Australian National Airlines Commission [1984] FCA 378 (7 December 1984).

In this case, if the employee does not agree to the notice being withdrawn by the employer, the original notice of redundancy will stand. This means the termination is ‘at the initiative of the employer’ and is not considered a resignation.

The employee is not required to provide a reason to the employer justifying his refusal to accept continued employment. If the employee refuses the employer’s offer to withdraw notice of termination, it would be regarded as a termination by the employer (redundancy) for the purpose of determining entitlements payable on termination of employment.

Resignation


The same logic applies to the withdrawal of notice by an employee. The requirement for an employee to give the appropriate period of notice is to allow an employer sufficient time to fill the position.

If an employee could withdraw notice at any time it could result in the replacement employee being left without a job, having already terminated their employment with the previous employer to accept the vacated position. See Gunnedah Shire Council /Cross v. Raymond Ernest Grout /Cross [1995] IRCA 694 (19 December 1995).

An exception to this is where the mental state of the employee at the time of the resignation meant the giving of notice was not considered a voluntary act.

Heat of the moment resignation


If the words of a resignation are unambiguous then an employer is entitled to treat them as such. However, words may be said by an employee “in the heat of the moment”, which industrial tribunals refer to as ‘special circumstances’. Where special circumstances arise it may be unreasonable for an employer to assume a resignation and accept it forthwith.

A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can be properly be assumed, then such inquiry is ignored at the employer’s risk.

He or she runs the risk that ultimately evidence may be forthcoming which indicates that in the ‘special circumstances’ the intention to resign was not the correct interpretation when the facts are judged objectively. See Canh K Ngo v Link Printing Pty Ltd - 771/99 N Print R7005 [1999] AIRC 57; (22 January 1999).

The bottom line: Once notice of termination of employment has been given by an employer to an employee, or vice-versa, the notice cannot be withdrawn except by mutual agreement of the parties.
 

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