Redeployment, consultation, third party communications, modern award requirements and redundancy pay are all part of the practicalities of implementing redundancies. An employer’s redeployment and consultation obligations were recently unpacked by the Fair Work Commission (“FWC”) after an employee claimed their redundancy was not genuine.

Of particular interest were the FWC’s comments around an employer’s redeployment obligations where they have related entities overseas. You can read the case here.

What was the case about?

The employer decided to undertake a business restructure due to financial difficulties. As part of this business restructure, the employer made the decision to implement redundancies in Australia and intended to relocate the technical support operations to their Indian headquarters.

The employee, who was a full-time software engineer in Australia, was made redundant. The employee filed an unfair dismissal claim asserting that there had not been a “genuine redundancy” in circumstances where she could have been offered a role at the employer’s Indian headquarters.

In response, the employer raised a jurisdictional objection, claiming the employee had not been dismissed, and a genuine redundancy had occurred. The employer claimed that there were no alternative redeployment options available for the employee at the time of her dismissal. The employer acknowledged that the employee was not offered a role in India because it was believed that the employee would not have accepted it due to the location of the role and reduced pay.

The employer also gave evidence that its consultation process had involved facilitating an online meeting with the employee in which she was informed her role would be made redundant and sending an email the following day confirming the details of the redundancy.

Was there a genuine redundancy?

For an employer to establish a redundancy is a genuine redundancy, they must be able to show:

• the employee’s role is no longer required to be performed by anyone;
• they complied with their consultation obligations in accordance with any applicable employment contract or industrial instrument; and
• it would not have been reasonable for the employee to be redeployed within their enterprise or an associated entity.

What did the FWC say?

The FWC found that the redundancy was not a genuine redundancy. The employer had failed to consult appropriately with the employee and had not considered redeployment to the organisation’s Indian headquarters.

Had the employer consulted with the employee about the vacant positions, the employer would have found that the employee was keen to work overseas for a period of two to three months, despite the lower wages. However, the employer assumed that the employee would not have accepted the Indian based role. The FWC cautioned that “It is dangerous for Employers with redeployment options to fetter offers based on their own prejudices.”

The FWC also looked at the consultation process that had been undertaken by the employer and determined that it did not meet the requirements under the employee’s relevant modern award and was merely a perfunctory exercise.

Key takeaways

Navigating redundancies is really about being aware of the obligations to employees. Redundancies often come about at a time when employers are facing difficult decisions, and avoiding an unfair dismissal claim at the end of a redundancy process is important.

The best approach is to get advice at the outset, when redundancies are being contemplated. This way organisations can be confident that their processes meet the required obligations. While this case concerned consultation and redeployment, there are many other obligations of which employers need to be aware.

You can read some of our previous articles on implementing large-scale redundancies, consultation obligations and rehiring after redundancy here, here and here.

Kirryn West James, Director and Vanessa Yol, Associate