Overview of the facts

Due to a reduction in demand, the business relocated processing of one of its products to a different plant. Within that plant, there were three different production roles, with employees in each function considered to be “production employees”. Those working in the relocated process would receive “limited further training” to be able to work in the other two production roles, continuing to work in the same plant.

The union and business were in dispute over the redundancy provisions of the business’ enterprise bargaining agreement (‘Agreement’) and whether there was a retrenchment entitlement. The union argued the employees who would be required to perform new duties should be entitled to retrenchment benefits, according to the Agreement, given the new duties would be significantly different to those previously performed.

The business argued that under the Agreement, redundancy only occurs where a role would no longer be performed at all and employees in that role are dismissed. The business further argued that because the roles were being relocated to a different plant and no employees were to be dismissed, no retrenchment entitlements applied.

The decision

The Commission found the union’s application overstated the differences in the roles, and the position changes were not significant enough to warrant retrenchment entitlements. Further, the business’ Agreement states that retrenchments may apply where the company cannot provide “suitable alternative employment”. The Commission found the alternative employment offered to the employees to be suitable, and additionally, according to the Agreement’s classifications, production employees are expected to work “flexibly across the plant”.

Lessons for businesses

While in this instance, the Commission found in favour of the business, this case highlights the need for employers to be aware of specific terms and conditions included in their industrial instrument and that the suitability of alternative employment offered may be scrutinised.

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 Janet Watt, Graduate Workplace Relations Advice Line Advisor

Fair Work Commission Decision [2019] FWC 4104