NB Lawyers – Lawyers for Employers successfully defended an unfair dismissal application (the Application) on behalf of one of our valued clients, the Lone Pine Koala Sanctuary. The operations of the Sanctuary, like many other businesses, were impacted by COVID-19. Specifically, the reduction in the number of tourists attending the Sanctuary required it to take certain steps to provide financial resources to care for its (adorable) wildlife. One of these steps were to make a number of roles redundant as they were no longer required (due to the reduction in attending guests).
What is a redundancy?
A redundancy occurs where a role is no longer required to be performed by anyone (as opposed to an employee no longer being required) due to changes in operational requirements of an employer’s business. A redundancy does not focus on whether the duties of a role are still required to be performed by an employer.
What is a ‘genuine redundancy’?
A ‘genuine redundancy’ under the Fair Work Act 2009 (Cth) requires an employer to demonstrate the following:
- it no longer required the person’s job to be performed by anyone;
- it has complied with consultation obligations under an award or enterprise agreement; and
- it was unreasonable for the employee to be redeployed.
If an employer can demonstrate all three (3) requirements to establish a genuine redundancy, the FWC will not have jurisdiction to determine an Unfair Dismissal application.
What happened in the Application?
A jurisdictional objection was made to the Application on the basis the former employee’s dismissal was a case of genuine redundancy.
Were there changes to operational requirements?
The Sanctuary argued they were no longer permitted to trade due to government restrictions on its trading (at the time of dismissal). Guests were no longer able to attend. Even if guests were permitted to attend, the Sanctuary would no longer require the former employee’s role to be performed by anyone because the role itself (involving guests holding koalas) would not be compliant with social distancing requirements.
The Applicant uniquely argued that the business decision of the redundancy itself was incorrect and therefore the FWC should determine that the matter proceed through to a normal process of unfair dismissal.
In its decision, the FWC emphasised the “The test…is whether or not the Employer made the decision it no longer required the position to be performed due to a change in operational requirements”. It rejected the former employee’s argument that just because some aspects of his duties were still being performed, he was not genuinely made redundant.
3 Practical Tips for Employers
In order to demonstrate a genuine redundancy has occurred, here are three (3) practical tips:
1. Changes to operational requirements require evidence
In the Application, the Sanctuary was able to demonstrate changes to operational requirements by providing evidence on the reduced number of guests attending its premises. It was also able to produce evidence demonstrating a reduction in revenue. These matters influenced the changes to operational requirements.
If employers decide that a position is no longer required to be performed by anyone, they should be prepared to justify that decision before a Court/Tribunal.
2. Conduct a genuine consultation process
As noted in the Application, where an employer is under an obligation under an award or enterprise agreement to consult with employees regarding changes with significant effects, the opportunity provided to employees (to consult with an employer) must be genuine.
Our suggestion to employers is to commence discussions with employees (holding roles which have been identified as potentially redundant) as soon as practicable after a decision has been proposed and of course prior to any irreversible decisions being made. We also suggest responding to the feedback provided by employees (preferably in writing) to demonstrate genuine consideration has been given.
3. Consider opportunities for redeployment
The Application clarified the proper test (for considering redeployment) is whether a vacant role exists for redeployment, as opposed to whether an employee can be redeployed into a role held by another employee.
Prior to making a decision to terminate an employee on the basis of the redundancy of their role, an employer should make an assessment of vacant roles within its organisation. If the employee has sufficient competence and skill to perform the role immediately or after a period of training, the employer may have an obligation to offer the employee redeployment into the vacant role. If an employer has identified a vacant role but deems the role to be unsuitable, contemporaneous notes should be kept justifying why the vacant role is unsuitable (which can be relied upon at a later date).