Background

An employee of almost 10 years was made redundant from his role due to an organisational restructure. The employee argued the redundancy was in contravention of the Fair Work Act (2009) (the Act), as he was not offered a ‘suitable redeployment’ option in accordance with the redundancy requirements provided in the Act.

In addition, he suffered ongoing mental health issues during his employment, resulting in extended periods of unpaid leave. He contends he was discriminated against in the dismissal process based on his mental health concerns.

He subsequently lodged an unfair dismissal application with the Fair Work Commission (the Commission).

The Decision

In order to successfully defend this type of unfair dismissal claim, the employer was required to demonstrate the dismissal was due to a genuine redundancy. This is done by following the processes defined in s389 the Act.

The Commission was satisfied the employee’s role was not required to be performed by anyone due to the operational restructure of the business. This was supported by the subsequent redundancies of 17 other employees. The business followed their consultation and notification requirements as per the Award, even though the employee refused to engage in discussions regarding the future of his role and its potential to be made redundant.

The organisation maintained a newly created role in the organisation required a more qualified individual with different skills and competencies than what the employee held, therefore it was not an option for suitable redeployment. The Commission considers whether it is reasonable in all circumstances for the employee to have been redeployed. The newly created role required a university qualification, which the employee did not have. In addition, its technical system requirements and expertise extended beyond the employee’s capability. The Commission was satisfied this role was not suitable for the employee.

In addition, the discrimination claim could not be substantiated, with the Commission accepting evidence provided by the business that the redundancy was due solely to a change in operational requirements and not influenced in any way by the employee’s state of mental health.

The Commission was satisfied on all grounds that the dismissal was a case of genuine redundancy within the meaning of section 389 of the Act. The employee was found not to have been unfairly dismissed and his application was dismissed.

Lessons for businesses

When considering unfair dismissal applications relating to redundancy, the Commission must be satisfied, among other qualifying criteria, the dismissal was not a case of genuine redundancy.

A business should ensure their redundancy process is compliant with s389 of the Act to be in the best possible position to defend an unfair dismissal claim. Importantly, this includes any consultation requirements in an applicable modern award or enterprise agreement.

How we can assist

Ensuring all redundancies meet the legislated requirements will help protect your business from a successful unfair dismissal claim. Our Managing Termination, Unfair Dismissal and Redundancy training will provide you with the knowledge and tools to mitigate the risks posed to your business together with our expert workplace relations advisors and consultants

Written by Natalie Antoniadis, Graduate Workplace Relations Advice Line Advisor

Ken McShane v Port Of Newcastle [2019] FWC 177 (14 January 2019)