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Consultation in Circumstances of Redundancy

The current industry downturn in Queensland has necessitated the termination/redundancy of employees in many circumstances. This has resulted in a number of redundancies being challenged as unfair dismissals.

A genuine redundancy is exempted from the unfair dismissal provisions of the Fair Work Act 2009 (Cth), however in order for this to occur, three criteria must be satisfied:

  1. The employer no longer requires the person's job to be performed by anyone due to changes in operational requirements;

  2. It is not available or reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or an associated entity of the employer; and

  3. The employer has complied with any obligation in a Modern Award or enterprise agreement that applies to the employment of consultation about redundancy.

The statutory requirement to consult with the employee(s) prior to termination where a Modern Award or enterprise agreement applies, is where many employers fail to comply and are therefore open to a claim for unfair dismissal. This was the case in a recent Fair Work Commission matter where four workers were reinstated after a finding that they were not "genuinely redundant" and that their employer took an "unduly hasty and largely tokenistic" approach to meeting its consultation and redeployment obligations. (Paul Williams and Ors v Staples Australia Pty Ltd [2017] FWC 607)

Consultation will need to be undertaken in respect of the proposed employee(s) for redundancy and should involve genuine discussions such as the following:

  • The Company is assessing its options in regards to the current downturn in works and ongoing requirements;

  • If the change is implemented, it is likely that there will no longer be the same number of positions for employees within the Company; and

  • In the absence of guaranteed on-going works or redeployment opportunities, this will likely lead to redundancies.

Consultation is to be undertaken as soon as the decision to terminate is made. It is recommended that advice be sought before implementing any redundancy because of these requirements. Drayton’s can provide you with a step-by-step guide to undertaking and implementing any redundancy processes.

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