When employers conduct an organisation-wide review of their operations, it can be both an exciting and challenging time. There are significant gains to be made by identifying inefficiencies and addressing them. However, the desire to move too swiftly and rush this process should be avoided. Moving too fast may result in employers either intentionally or unintentionally disregarding their legal obligations to employees.
This kind of disregard was the subject of a recent decision of the Fair Work Commission (FWC) where a community legal centre made its 65 year old, long serving General Manager redundant with no consultation or exploration of redeployment (Girdler v Western Sydney Legal Centre Incorporated T/A Western Sydney Community Legal Centre (WSCLC) [2017] FWC 4130).
Prior to terminating the General Manager’s employment, the legal centre’s Committee of Management had engaged a consultant to conduct a review of the organisation. The consultant provided a report recommending some structural changes. One of those changes was to do away with the General Manager position and create three new senior management positions – a Director, a Human Resources Manager and a Community Programs Manager.
Without any notice that her position was at risk of redundancy, the incumbent General Manager was called to a meeting where she was informed that her position was redundant and her employment was terminated, effective immediately.
The General Manager made an application to the FWC claiming that she was unfairly dismissed. She denied that her dismissal was a genuine redundancy because her employer had not complied with any of its consultation obligations and the new Director position performed all of her General Manager duties (with an increased salary), less some of the HR duties that had been allocated to the new HR role.
At the FWC’s hearing of the matter, the consultant who recommended the change in management structure gave evidence that she did not advise the legal centre on the termination of the General Manager’s employment. In considering the matter, Commissioner Riordan commented that there seemed to be a strained relationship between the Committee of Management and the General Manager, noting that not a single member of the Committee of Management came to the FWC to either give evidence or witness the proceedings.
Commissioner Riordan found that the legal centre’s dismissal of the General Manager was not a genuine redundancy and therefore, it did not have a valid reason for dismissing her. Commissioner Riordan said that the legal centre’s actions were “fanciful and capricious” and that its dismissal of the General Manager was unfair.
In ordering a remedy in favour of the General Manager, Commissioner Riordan said:
If not for the deliberate and inappropriate actions of the Committee of Management, Ms Girdler would have been appointed to the role of Director, the functions of which she was already performing. The only changes to Ms Girdler’s former role have been the increase in remuneration and the removal of the HR function. Ms Girdler was performing every component of the new Director role but without the title. It was her job.
The legal centre was ordered to reinstate the General Manager into the new Director position.
Employers should note that whilst the recommendations of consultants may seem attractive, the employer bears the ultimate responsibility for deciding if, when and how to implement those changes in a compliant way. Reliance on the recommendations of a consultant will not absolve an employer of their legal responsibilities to employees.
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