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 the two employees into different workshops. No further action was taken.

A short time after that, the employee was visited by a superintendent who nominated the employee to undertake work “on site” rather than be in the workshop. However, the employee refused the request because he had a medical condition involving vertigo. Despite being on medication, the employee led evidence that he experienced dizziness and could not work at heights on scaffolding.  

At the same time a major project was drawing to a close which would require 115 employees to be made redundant. The employee was among those affected. He subsequently claimed that Hertel placed him on a redundancy list and dismissed him in because he complained about workplace bullying and harassment. The company’s HR manager defended the company’s approach to implementing redundancies and denied that his reason for the employee being on the shortlist was to “wipe his hands of the complaint”. He provided evidence that the employee was placed on the shortlist because he could not work on site and could only work in the workshop.

Judge Smith agreed with the HR manager’s evidence, and found that the complaint “played no part in any action taken” by the HR manager to make the employee’s position redundant. Judge Smith accepted that there would be no point in retaining the employee if he could only work in the workshop. Further Judge Smith commented that, given the operational requirements of the business, the frequency of mass redundancies and the fact that the HR manager had eight years’ experience working for the AMWU, it would be unlikely that he would have moved forward with a redundancy for the simple purpose of getting rid of a complaint. As a result, the employee’s claim of adverse action was dismissed.

Lessons for Employers

  • Ensure the reasons for redundancy are clearly established and communicated with the affected employees.
  • Remember redundancy relates to the job and not the person. Performance-related issues should not be addressed in redundancy meetings.
  • To meet the requirements for a genuine redundancy under the FWA the employer must establish that it no longer needs the job performed by anyone and that it has met its consultation and redeployment obligations.



[1] Hull & Anor v Hertel Modern Pty Ltd [2017] FCCA 2579 (2 November 2017).

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