Is there a ‘genuine redundancy’? Distinguishing ‘duties’ versus ‘the job’
An employee’s unfair dismissal claim was unsuccessful as the Fair Work Commission found there was a ‘genuine redundancy’.
Job not required
In determining whether there was a ‘genuine redundancy’ the Commission first considered whether ‘…the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise…’.
The employer asserted the redundancy was necessary due to its new product sales having fallen by 15% and its product servicing revenue by 15.7%. It was further contended by the employer that it considered the ‘commercial challenges at hand’ and the ‘sustainability of the business’ in deciding to undertake a reorganisation of the employee’s duties which were distributed amongst several other employees. The employer did not deny that some of these duties were given to an employee that joined the business after the former employee’s dismissal.
‘Duties’ versus ‘the job’
The Commission rejected the employee’s argument that there cannot be a genuine redundancy where the ‘duties’ still needed to be performed.
Importantly, the Commission distinguished between the ‘duties’ and ‘the job’.
The Commission explained that the issue of whether there is a genuine redundancy according to section 389 of the Fair Work Act 2009 (Cth), is not ‘whether duties survive’; but rather ‘…whether the job’ the former employee undertook ‘still exists’.
In this case, due to a ‘downturn in business’, the employer had redistributed duties which were previously the duties of the dismissed employee, to other employees. This meant that the former employee had ‘no substantial duties left’ to undertake. Therefore, the employer succeeded in its defence, as the change in ‘operational requirements’ led to the former employee’s ‘job’ no longer being required.
As the employee was enterprise agreement/award-free, there was no obligation on the employer to consult with the employee about the redundancy.
The Commission considered whether ‘it would have been reasonable in all the circumstances for the person to be redeployed within … the employer’s enterprise; or … an associated entity…’. The Commission referred to another case explaining ‘…whether redeployment would have been reasonable, is to be applied at the time of the dismissal’.
The former employee argued that there was an advertised position close to, or when, the former employee’s position became redundant. However, even though this was ‘an alternative job…’ the Commission said ‘it would not have been “reasonable”’ for the former employee to be offered this ‘more junior’ position with ‘a substantially lower salary’ ‘as an alternative’ role. The ‘alternative job’ and the redundant employee’s former role were ‘markedly different’ regarding ‘their function, remuneration, and seniority’.
The redundant employee claimed there were business efficiency problems which if corrected, would have negated the need for his position to be made redundant.
The Commission said that whilst the employer ‘conceded there may be efficiency issues’, the former employee’s argument was not on point. In this regard, the Commission emphasised the ‘managerial discretion’ involved in how a business is structured.
This case helpfully emphasises the distinction between ‘duties’ performed and ‘the job’ so there may be a genuine redundancy if, like in this case, the duties that formerly comprised one job are later dispersed amongst other employees.
This case is also a useful reminder that there is ‘managerial discretion’ involved in deciding how the business is to be structured. Therefore, if an employee’s job is made redundant, just because there may have been alternative ways to achieve the required cost savings, does not automatically mean there was not a ‘genuine redundancy’.
National Workplace Lawyers
Note – this article is for information purposes only and does not purport to be comprehensive or to render legal advice.15 July 2019 back to news feed | back to top