An employee’s dismissal will not be a case of genuine redundancy if it would have been reasonable in the circumstances for the employee to be redeployed within the employer’s enterprise or one of its associated entities.
It is for this reason that employers must approach the implementation of redundancies cautiously, considering all available redeployment opportunities and where reasonable, making offers of employment to the impacted employees.
The Fair Work Commission (FWC) has recently warned that a redundancy is not likely be genuine if employers assume or apply their own prejudices when considering the potential redeployment opportunities available to an employee.
In Khliustova v Isoton Pty Ltd [2023] FWC 658, the FWC heard that an employee, who was a Software Engineer for Isoton Pty Ltd (the Employer), was made redundant as a result of a restructure prompted by significant financial challenges requiring a reduction of future costs.
Some six months prior to the employee’s redundancy, the Employer had expanded its operations to India creating a new technical support function which was led by one of its related entities.
The employee was notified of her redundancy during an online meeting with the Employer and three other impacted employees. The employee was then blind copied into an email setting out the reasons as to why her position was being made redundant and confirming her final date of employment.
The employee subsequently lodged an unfair dismissal application. The Employer raised a jurisdictional objection, arguing that the employee’s dismissal was a case of genuine redundancy.
In the jurisdictional hearing, the Employer conceded that during the restructure, its related entity had continued to recruit for a reduced number of positions in its Indian operations. It submitted that it did not offer the employee those available redeployment opportunities because it assumed that she would not accept an overseas position with a lower remuneration.
However, the FWC did not accept this argument, finding that the work performed by the employee would have enabled her to perform at least one of the roles available in India.
The FWC was also critical of the online meeting conducted by the Employer, finding that it did not satisfy the consultation requirements specified under the modern award of which the employee was covered. Instead, the FWC considered the meeting to be “at best a perfunctory exercise” in circumstances where the Employer had already made the decision as to the employee’s redundancy.
The FWC found that had the Employer engaged in consultation and provided the employee with the opportunity to be heard or to express her views, it may have learnt that the employee was in fact keen to work in different cultures and experience the position overseas, notwithstanding the lower remuneration.
The FWC was highly critical of the Employer in this regard, warning that: “It is dangerous for Employers with redeployment options to fetter offers based on their own prejudices”.
It is on this basis that the FWC found that the Employer had failed to offer the employee a role that was available in its associated entity and would have been reasonable in all the circumstances for the employee to be redeployed in.
Therefore, the FWC dismissed the Employer’s jurisdictional objection on the basis that the redundancy was not genuine and referred the matter for further conciliation.
When implementing redundancies, employers must have regard to whether it is a reasonable in the circumstances to offer redeployment within its organisation or an associated entity. What is deemed reasonable will depend on a variety of factors including, but not limited to, location, remuneration, qualifications and experience.
Interestingly, this decision suggests that a cautious approach should be taken by employers when considering these factors and that care should be taken to not make assumptions as to whether or not an employee will accept a redeployment opportunity, particularly when it relates to subjective factors such as location and remuneration.
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