BlandsLaw - Blog posts from genuine redundancy
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Establishing the genuine reason for a redundancy

When redundancies are required as part of addressing a decline in business, employers are urged to consider the golden rule: redundancy relates to the job, and not the person. It is vital for employers to clearly establish (and document) the reasons for redundancy decisions, to prevent disgruntled employees from claiming their selection for redundancy was for an unlawful reason.

In a recent case[1], the Federal Circuit Court found that there was no adverse action against a Hertel Sheet Metal worker who alleged that the real reason for his redundancy was a complaint he had made against a co-worker and his supervisor. In the lead-up to the redundancy, the employee claimed he was experiencing instances of bullying and harassment from a co-worker, which included repeated racist and demeaning comments. When the employee raised the issue with his foreman, he claimed that he overheard the foreman say to another colleague that he “did not give a shit about his complaint.” There was a further confrontation and management decided to separate

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Is refusing to accept a pay-cut a redundancy situation?

 

Employers are urged to exercise caution when making an employee’s position redundant. In a recent case,[1] the FWC has made it explicitly clear that a dismissal will not constitute a genuine redundancy if it arises after an employee has refused to accept a pay-cut. Employers will most certainly land themselves in hot water if they simply seek to replace a “redundant” employee with someone at a lower cost.  

Parabellum, who provided emergency response services to Chevron, sought to reduce four workers salaries by 13%, when Chevron cut its contract prices. The workers refused to accept the pay-cut and their roles were subsequently made redundant as part of an operational restructure. The employees argued their dismissal was not a case of genuine redundancy because their positions were filled by newcomers on lower salaries.

For a dismissal to be a case of a genuine redundancy, the Fair Work Act 2009 (Cth) (“FWA”) states that the employer “no longer requires the job to be performed by anyone”.

Parabellum urged the

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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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