Resignations exclude claims for redundancy

Cases

Resignations exclude claims for redundancy

When employees’ employment is terminated by their own act of resignation, at a point in time when the employer might otherwise have redeployed or retrenched them, the employees forfeit their right to redundancy payments

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Key point: When employees’ employment is terminated by their own act of resignation, at a point in time when the employer might otherwise have redeployed or retrenched them, the employees forfeit their right to redundancy payments.

Detail: This case concerned applications for redundancy payments by former employees of the Commonwealth Bank who resigned from their employment when its' IT services were outsourced to a third party.

The Commonwealth Bank distributed to all employees working in the Information Services Department a document dated 2 September 1997 titled IS-Special Update which stated: ‘Will I be made redundant if I stay with the Bank? No. If you choose to stay with the Bank you will continue to work in your current role.’

 

Justice Moore of the Federal Court considered this evidence and other evidence and concluded that the employees were not entitled to redundancy benefits.

An obligation on the Bank to retrench and/or provide an entitlement to severance payments in circumstances where an employee was given no effective choice was not demonstrated. On the agreed facts, they could have remained in the employment of the Bank.

See: Finance Sector Union of Australia v Commonwealth Bank of Australia (with Corrigendum dated 19 March 2004) [2004] FC A 257 (18 March 2004). – Moore J.

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Redundancy

 

  

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