Redundancies - Are there alternatives?
In a recent newsletter we discussed the requirements in making an employee’s position redundant.
This revolved around the need to consult with the employee as required under the awards and giving the employee the opportunity to provide alternatives to the position being made redundant and whether the redundancy is reasonable in all of the circumstances.
In a case originating in the Fair Work Commission a mining company was found to have unfairly dismissed a number of employees as they were not cases of genuine redundancies as the employees could have been employed in roles required by the employer but were then undertaken by contractors.
The employer appealed the matter to the Federal Court.
The full Federal Court dismissed the appeal, finding that it was "reasonable in all the circumstances" for the employer to reduce its reliance on external service providers (the contractors) and redeploy its affected employees to positions currently occupied by those contractors.
The Court held that "reasonable in all the circumstances" requires analysis of what an employer could have done apart from dismissing the employee. The fact that redeployment was made more difficult by the need to retrain employees did not act as a barrier to redeployment.
The decision serves as a stark warning for employers that termination of employment due to redundancy should be viewed as a 'last resort'. The Commission will only be satisfied that a dismissal is a "genuine redundancy" when an employer has considered all options short of dismissing an employee. These options include:
redeploying an employee to a role occupied by an independent contractor or position occupied by a labour hire employee,
retraining an employee for a different position,
retaining an employee for a short period in circumstances where a redeployment position is expected to become available.
If you are considering any termination of employment for whatever reason, be in conduct, performance or redundancy it is always best to obtain advice.