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Employer unscathed by ‘sham’ redundancy selection process

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Blue Circle Southern Cement (BCSC) took a “flawed” approach in selecting a worker for redundancy.  In October 2009, BCSC conducted an assessment and selection process to determine which one of two maintenance planners who would be retrenched.

The planner’s manager convened a four-person assessment panel and purportedly appraised each planner’s respective skills, performance and conduct.

The retrenched planner subsequently filed an unfair dismissal claim against BCSC on the basis that the selection process was a “sham”, and that the assessors had been influenced by his biased manager.

Fair Work Australia (FWA) agreed, and pointed out the flaws in the assessment process, being that all four appraisal forms were filled out in the same room at the same time, and were identical.  Senior President Anne Harrison said it was not credible that this had happened “without some discussion, or worse, coaching”.

Notwithstanding these flaws, FWA dismissed the unfair dismissal claim and ruled that the selection process was irrelevant, “even if unsatisfactory”, because the company’s restructuring was genuine and redundancies were to occur as a consequence.

FWA further found that the retrenched planner was not covered by any modern award or enterprise agreement, and therefore the employer was not required to consult the retrenched planner about the redundancy.

MST Analysis

  • Under the Fair Work Act 2009, an employee covered by a modern award or enterprise agreement can only be found to be “genuinely redundant” if the employer consults the employee about the redundancy in accordance with the processes contained within the modern award or enterprise agreement.  In the absence of such consultation, “genuine redundancy” will not be found and employees may be able to bring an action under unfair dismissal.
  • Even where an employee is not covered by any modern award or enterprise agreement, employers should still conduct proper consultation processes in preserving the self-esteem of its employees.  The benefits include addressing the negative ramifications of retrenchment on continuing employees, and demonstrating fairness of management.
  • Employers should carefully consider their approach to redundancy and seek legal advice where possible.

Our Workplace Relations lawyers have extensive experience in assisting its clients with complying with the most current workplace relations laws, including advice relating to redundancy and business restructuring.

Authors: Charles Cody and Chao Ni

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