EMPLOYERS TO RE-THINK REDUNDANCY WITH THE REQUIREMENT TO REDEPLOY
With effect from 1 January 2010, the redundancy provisions in the Fair Work Act, 2009 (Cth) came into operation. The new redundancy provisions bestow a positive obligation on employers to consider opportunities within an employer’s broader structure (including associated entities) to redeploy. For employers, proactively pursuing and proposing alternate employment opportunities before redundancy termination will minimise the risk of unfair dismissal or adverse action litigation being brought by your employees.
An unfair dismissal claim is not available in circumstances of genuine redundancy. Employers must however be mindful of the requirement to redeploy where it is considered reasonable in all circumstances.
Genuine redundancy arises if:
• An employer no longer requires an employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
• An employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
The circumstances of genuine redundancy are qualified by the requirement to redeploy if it would have been reasonable in all the circumstances to redeploy within the employer’s enterprise or the enterprise of an associated entity of the employer.
The obligation to redeploy before resorting to redundancy is far-reaching, extending outside an employer’s enterprise to associated entities and tested by what is ‘reasonable’ in all the circumstances.
Employer’s should be mindful that what is seen as a ‘reasonable’ redeployment option will vary for each individual employee and ought to consider adopting policies or procedures that comply with this requirement.
An employee’s qualifications and experience should be considered in relation to other roles available and even in circumstances where redeployment would require relocation or a pay-cut, these opportunities ought to be presented rather than making assumptions whether this would or would not be acceptable to an individual employee.
In situations involving a large number of employees with a similar skill set and a limited number of redeployment options consider giving each employee the opportunity to respond to the selection criteria.
To minimise the risk of unfair dismissal claims, employers should ensure that their employees are given the opportunity to defend allegations of unsatisfactory performance where performance if part of the selection criteria.
As well as following legislative consultation requirements, employers should take care to adhere to any consultative process prescribed in a modern award or enterprise agreement.
Throughout the process, employers should keep written documentation of their redeployment considerations and consultations, which could be of use if terminated employees make unfair dismissal or adverse action claims. When redundancy is unavoidable, open and honest communication is essential, and thorough and transparent termination procedures will help to minimise and defend any subsequent litigation.
To obtain further information or discuss the implications for your business, please contact Kenneth Law on[email protected]