In Short: 

• Redundancy provisions bestow a positive obligation on employers to fully explore opportunities within an employer’s wider corporate structure 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 employees.

In Depth:

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.

Redeployment Opportunities

The obligation to redeploy before resorting to redundancy is far-reaching, extending outside an employer’s immediate enterprise to associated entities and tested by what is ‘reasonable’ in all the circumstances.

When considering redundancy termination employers will need to canvas and present any redeployment opportunities within associated entities which includes any related body or entity over which control or influence may be exercised.

Employer’s should also 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 for example, require relocation or a decrease in pay, 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 employees² with similar skills and a limited number of redeployment options, each employee ought to be given the opportunity to respond to selection criteria. To minimise the risk of unfair dismissal claims, employers should ensure that each of their affected employees are given the opportunity to present their skills as well as to defend allegations of unsatisfactory performance where performance forms part of the selection criteria.

Consultation Obligations
 

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. Group postings and discussions will not adequately serve any consultation process and individual employee attention to circumstances and opportunities will be vital.

When redundancy is unavoidable, open and honest communication is essential, and thorough, consultative and transparent termination procedures will help to minimise and defend any subsequent litigation.

There are also additional notification and consultation provisions under the Fair Work Act with respect to Centrelink and unions for employers seeking to make 15 or more employees redundant.

“For more information on redundancy, unfair dismissal or adverse action, please contact Andrew Bland.”