BlandsLaw - Blog posts from Redundancy
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Employer Obligations when implementing redundancies

The redundancy process is complex and, if the proper process is not followed, there is a high chance that employers will fall short of meeting the requirements of a genuine redundancy. Getting the process right is important, as employees will fail in an unfair dismissal claim if their dismissal was a case of genuine redundancy.

Under the Fair Work Act 2009, the following criteria apply in cases of redundancy:

  1. The employer no longer requires the person’s job to performed by anyone because of changes in the operational requirements of the enterprise; and
  2. The employer has complied with any obligation under a modern award or enterprise agreement to consult about the redundancy; and
  3. It is not reasonable in all the circumstances to redeploy the employee in either the employer’s enterprise or an associated entity of the employer.

In a recent case heard by the FWC[1], four Staples workers were reinstated and awarded backpay after it was found their employer failed to meet its consultation and redeployment obligations, and instead

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Calculating Redundancy Pay: Do previous casual hours count?

A full bench of the FWC has handed down a landmark decision which has changed the previously accepted interpretation of ‘service’ under the FWA and, in effect, turned upside-down the way in which redundancy payments are usually calculated.

Following the decision in AMWU v Donau[1], a permanent employee’s initial period of regular and systematic casual employment with the same employer will now count towards their period of continuous service used to calculate redundancy pay. Whilst many employees will be rejoicing with this news, the decision holds considerable and far-reaching ramifications for employers who will have to pay the price.

The case involved Donau, a Newcastle engineering and ship-building company, who commenced a large scale redundancy process. Initially, the company did not include prior continuous service by casuals in their redundancy pay calculations. The AMWU argued that this was in breach of their enterprise agreement, which specified that redundancy pay is to be calculated according to periods of continuous employment. The dispute then turned its discussion towards the definition of

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The National Employment Standards provide for redundancy pay, to eligible employees, based on their length of service. There is provision under the Fair Work Act for employers to make an application to have their obligation to make redundancy payments reduced or even waived completely. The two grounds for this application are that the employer has obtained other acceptable employment for the employee, or that they cannot pay the amount. 

A recent FWC decision considered the issue of what an employer needs to do to show that they ‘obtained’ the other acceptable employment. 

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We regularly provide advice around redundancy and know from practice that it can be an area fraught with pitfalls. To meet the test for genuine redundancy under the Fair Work Act the redundancy process must include the employer exploring, with the employee, any available redeployment options. Related to this concept is that of ‘alternative acceptable employment’ which may affect the redundancy pay.

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Don’t Discount Redeployment Options to a Junior Role When Making Employees Redundant

The Fair Work Act 2009 (Cth) ("the Act") provides guidelines and provisions on the process of dismissing an employee, and in what circumstances a dismissal may be consider unfair. Under the Act, an employer will be exempt from an unfair dismissal remedy if the dismissal is made by way of a redundancy. However, the redundancy must be one that is considered genuine. At s389 of the Act, a person’s dismissal is not classed as a genuine redundancy if "it would have been reasonable in all the circumstance for the person to be redeployed within (a) the employer’s enterprise; or (b) the enterprise of an associated entity of the employer".

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