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Reasonable redeployment – A hurdle to genuine redundancy

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“Genuine redundancy” is a complete defence to an application for unfair dismissal under the Fair Work Act 2009 (Cth) (“the FW Act”). [Note: this FW Act definition is not to be confused with the definition of “genuine redundancy” for purposes of the Income Tax Assessment Act 1997 (Cth)].

Section 389(2) of the FW Act states that a person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a)  the employer’s enterprise; or
(b)  the enterprise of an associated entity of the employer.

In the case of Ulan Cole Mines Limited v A Honeysett & Ors (1), the Full Bench of Fair Work Australia handed down its judgment on what constitutes a case of reasonable redeployment.

In the Ulan case, 14 mining employees were dismissed as a result of a restructuring of Ulan’s coal mining operations. However, at the same time, there were vacancies for positions as mineworkers at various different mines operated by either Ulan or its associated entities. Rather than redeploying the 14 employees into these available positions, the dismissed employees were not given any preference and had to compete against other applicants for the position. A number of these employees filed an application for unfair dismissal against Ulan, and it was held that a number of the dismissals challenged were not cases of genuine redundancy.

The Full Bench stated that the question of whether it was reasonable to redeploy an employee internally or with an associated entity must be considered as at the time of the dismissal, and will depend on a number of factors including:

  • the nature of any available position;
  • the qualifications required for the position;
  • the employee’s skills, qualifications and experience;
  • whether the employee can perform the position to the required standard either immediately or with a reasonable period of retraining;
  • the location of the job;
  • the remuneration which is offered; and
  • where the available position is in an associated entity, the degree of managerial integration between the employer and that entity.

If an employee is dismissed and is then subsequently employed within an associated entity, this might indicate that the employee could have been re-deployed at the time of the initial dismissal.

The Full Bench further stated that subjecting a redundant employee to a competitive process for an advertised vacancy in an associated entity may lead to the conclusion that the employee’s position was not made genuinely redundant.

Employers beware

Where redundancy is cited as the reason for the dismissal of an employee, employers should be mindful of the following:

  • The dismissal may be challenged at court and can be found not be a case of genuine redundancy.
  • A genuine redundancy can only be established if:
    • the employee’s job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
    • the employer has complied with its obligations under any modern award or enterprise agreement to consult with the employee about the redundancy;
    • it was not reasonable for the employer to redeploy the employee internally or with an associated entity.
  • Written records which justify a case of genuine redundancy should be kept by the employer, such as:
    • meeting minutes evidencing the decision process behind making a position redundant;
    • meeting minutes of any consultation with the employee about the redundancy, including offering the employee available positions within the employer’s enterprise or the enterprise of an associated entity.
    • written evidence showing the employer to have made all reasonable attempts to redeploy the employee into a suitable role.

MST has extensive experience in assisting its clients to comply with the most current employment laws, including advising on unfair dismissal proceedings and genuine redundancy. Please contact one of our Workplace Relations lawyers for further information.

(1) [2010] FWAFB 7578

Author: Chao Ni

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