Resources: Blog

Consultation and genuine redundancy

Blog
|

We don’t talk anymore...

The Fair Work Act 2009 (Cth) (FW Act) requires Enterprise Agreements to include a consultation clause obliging employers to consult with their employees about “major workplace change” or a change in regular rostering or ordinary hours of work.

The Fair Work Act 2009 (Cth) (FW Act) requires Enterprise Agreements to include a consultation clause obliging employers to consult with their employees about “major workplace change” or a change in regular rostering or ordinary hours of work.

In addition to Enterprise Agreements, Modern Awards also include consultation terms where employers must notify employees of major workplace change and engage in discussion.

Consultation clauses are activated when an employer determines to restructure its workforce. This may lead to, for example, a reduction in personnel numbers, reduction in job opportunities and / or more work for the remaining employees. Compliance with the requirements of such clauses in a Modern Award or Enterprise Agreement is important – especially if redundancies are implemented.

To ensure that the “genuine redundancy” exemption from unfair dismissal is secured, the employer must be able to show compliance with an applicable consultation obligation. Section 389 of the FW Act provides that an employee is made genuinely redundant if:

  • the person’s job is no longer required to be performed by anyone due to operational requirements;
  • the employer complied with the obligations to consult in any applicable Modern Award or Enterprise Agreement; and
  • redeployment was not reasonable in all of the circumstances.

In NT v Crown Melbourne Limited [2016] FWCFB 4675, the Employee appealed to the Full Bench of the Fair Work Commission (FWC) on the grounds that the Employer did not comply with the consultation obligations in the Crown Melbourne Enterprise Agreement 2013 (the Agreement) prior to the redundancy of his position in April 2015. There were two applicable consultation clauses in the Agreement: one which required the Employer to consult when there was major workplace change (clause 24) and another clause which was relevant to redundancies (clause 33).

At first instance, the Commissioner agreed with the Employer’s jurisdictional objection and determined that the Employee’s employment was terminated by way of genuine redundancy.

On appeal, the Employee argued that the Commissioner fell into error as she did not correctly interpret and apply the Agreement’s consultation clauses.

The Employer submitted that clause 33 of the Agreement set out the obligation to consult with employees in circumstances of redundancy. This clause required the Employer to consult with the relevant union to determine alternatives to redundancy. The Employer argued that the relevant union, United Voice was contacted and alternatives to redundancy were discussed. It relied upon a letter from the United Voice which stated that telephone correspondence took place and that the Employer consulted with them prior to the Employee’s redundancy.

The Full Bench held that the consultation on major workplace change clause applied where major workplace change affected a group of employees rather than individual redundancies. It determined that given the United Voice had acknowledged that the Employer had consulted with them in relation to the redundancy, the Employer had complied with its obligations to consult. The Employee’s appeal was dismissed.

 

Best practice consultation

Whilst in the above case the Employer’s consultation with the union was held to be enough to satisfy the consultation obligations in the Agreement, best practice indicates that consultation with employees will include notifying the employee of the change as well as discussing the change with employees. Part of this process will include taking into account concerns or other matters raised by employees and meeting with the employee/s to address their concerns properly.

 

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

 

Similar articles

New annualised salary arrangements in more Awards

Special Edition E-Update

The Fair Work Commission has continued its review of annualised wage arrangements in modern awards.

Read more...

Casual Terms Award Review 2021

NEWS UPDATE

In March 2021, the casual employment amendments to the Fair Work Act 2009 (Cth) (FW Act) introduced a new statutory definition of “casual employee” and an entitlement to casual conversion as one of the National Employment Standards (NES).

Read more...

Fair Work Commission rejects extension of time application after finding that the date of dismissal was made reasonably clear to the employee

Time's Up

The Fair Work Act 2009 (Cth) imposes a strict 21-day time limit for employees to file unfair dismissal applications in the Fair Work Commission. The statutory limit starts from the date the dismissal takes effect.

Read more...

Commission applies test confirmed by High Court in distinguishing between employee and contractor

Sham slam

In a recent decision, the Fair Work Commission has applied the test recently confirmed by the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, in distinguishing between employees and contractors.

Read more...

Full Bench looks at meaning of dismissed for the purposes of the unfair dismissal jurisdiction

Down but not out

The question of whether a demotion will constitute a dismissal under the Fair Work Act 2009 (Cth) was considered by the Full Bench of the Fair Work Commission NSW Trains v James [2022] FWCFB 55.

Read more...

Employer fails to disprove adverse action claim

Step back

A recent decision of the Federal Circuit and Family Court of Australia has reaffirmed the standard of proof that is required to disprove allegations of unlawful adverse action under the Fair Work Act 2009 (Cth).

Read more...

Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Signup to receive the latest industry updates with commentary from the Workplace Law team direct to you inbox.