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RedundancyNovember 3, 2015
Aleksandra Cvejic v Academy Services Pty Ltd 2015
When businesses face hard times it is sometimes necessary to consider options such as redundancy. However, it is very important that employers ensure there is a genuine reason for the redundancy and that they follow a fair redundancy process. As shown below, failure to follow the right process can easily result in unfair dismissal.
In this case, the former employee alleged that she had been unfairly dismissed on the grounds it was not a genuine redundancy situation. The Fair Work Act 2009 (FWA) stipulates that a genuine redundancy is when an employer no longer requires the employee’s job to be done by anyone because of operational requirements of the employer’s enterprise. The FWA also says that the employer must comply with all obligations in the relevant Modern Award or enterprise agreement regarding the need to consult about the redundancy. Employers must also bear in mind they will be under an obligation to attempt to redeploy an employee affected by redundancy within the employer’s enterprise or within the enterprise of an associated entity.
The employee had worked as a commercial cleaning operator servicing a cleaning contract in Adelaide for the Australian Taxation Office. She had been in this role for just under two years when her position was made redundant. The employer argued that the termination of employment was a genuine redundancy on the basis there was a reduction in the hours available, resulting in modified rosters and the realisation that her position was no longer required. In the termination letter the employer also stated that there was no alternative employment that could be offered at the time.
During the hearing, it was agreed the employer did not follow the proper consultation processes under the relevant award or agreement and so, in accordance with the FWA, there was no genuine redundancy. The employer had only had a conversation with the employee and provided a termination letter the same day. This was deemed as inadequate and the employers failure to genuinely consult resulted in unfair dismissal.
This case demonstrates that one small misstep in procedure can have very significant consequences for the employer. The employee was not reinstated but did have compensation awarded to her for having been unfairly dismissed. Employers should always seek advice prior to acting in relation to redundancy. Not only do operational reasons have to be established, but legislative requirements regarding compliance with awards and agreements must be met in order to avoid a similar outcome to this case.