28 Jun Redundancy Consultation: A Step Not to Miss
A failure to properly comply with the steps required for in a redundancy situation can have unplanned consequences. The recent case of Jennings v The Trustee for Alsop Gordon & Best Unit Trust t/a AGB Training  FWC 638 (Jennings v AGB) provides an example of a failure to properly comply with an Award consultation provision in a redundancy situation. Failure to comply meant the reundancy was not a “genuine redundancy”.
The facts of Jennings v AGB are as follows:
The Respondent had determined, due to a downturn in business, that they did not require the Applicant’s job to be performed.
On 23 August 2018, the Applicant attended a meeting. At the meeting, the Applicant was told that the company was restructuring, and she could accept redundancy or take an alternative role that the company was creating for her, which was at a lower salary with fewer responsibilities.
On 24 August 2018, at another meeting, the Applicant was further consulted about the redundancy and redeployment. The Applicant said she required more time to seek advice.
On 3 September 2018, after a period of personal leave, the Applicant returned to work. That day she attended a meeting. The Applicant was provided with a potential contract for the alternative role.
On 4 September 2018, the Applicant attended a further meeting. At the meeting, the Applicant stated she did not accept the new position.
If the Fair Work Commission (FWC) is satisfied that a dismissal event was not a case of genuine redundancy, it is open to finding an employee was unfairly dismissed under section 385(d) of the Fair Work Act 2009 (Cth) (FWAct). Section 389 of the FWAct provides:
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) 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.
What does consultation mean? The case of Pritchard v Rev. Fr Victor Farrugia, St Augustine’s Catholic Church Melbourne  FWC 5298, in summarising the law on consultation, provides:
The right to be consulted is not to be treated perfunctorily or as a mere formality.
Consultation requires the employee to provide a genuine opportunity to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action.
What will constitute such an opportunity to consult will vary according to the nature and circumstances of the case.
A right to be consulted is not a right to veto a decision by an employer.
In the case of Jennings v AGB, Deputy President Coleman found that the Respondent had no longer required the Applicant’s job to be performed and the Respondent had reasonably offered a position of redeployment. The issue for the Deputy President came down to the consultation provisions of clause 8.2(c) in the Educational Services (Post-Secondary Education) Award 2010 (the Award). The Award required that:
For the purposes of the discussion under clause 8.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
Although the Deputy President found there had been extensive discussion about the redundancy, the reasons for it, and the alternative role, a failure to comply with the Award to provide to the Applicant all relevant information in writing meant the redundancy was not genuine. With this preliminary issue dealt with, the Deputy President went on to find for the Applicant, that her dismissal was harsh, unjust and unreasonable.
Consultation can provide a way that both employees and employers are able to properly engage in the redundancy event. It is not intended to be a mere formality. For this reason, it should be considered as an essential step in the redundancy process by employers and employees.
Written by Angus Macpherson
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