When an employee who falls under the national workplace relations system is unfairly dismissed from their employment, they may bring a claim under the unfair dismissal provisions of the Fair Work Act 2009. However, if a dismissal is a ‘genuine redundancy’, it is not an unfair dismissal. This page deals with redundancy in Australia.
Genuine redundancy under the national workplace relations system
Section 389 of the Fair Work Act 2009 defines the term ‘genuine redundancy’.
Firstly, to establish whether a dismissal is a genuine redundancy, consider whether the job that was performed by the employee is no longer required by the employer because of a change in the operational requirements of their business.
This could be the case for any of the following reasons:
- There has been a technological development that means a person is no longer required to perform certain tasks
- The employer is downsizing and needs fewer employees than they did before
- The employer has decided to relocate its business, or
- The responsibilities of the employee are to be redistributed among other staff members.
Secondly, to establish whether a redundancy is genuine, consider whether the employer has complied with any requirement to consult with the employee about the redundancy. This may be a requirement under a modern award or enterprise agreement into which they have entered with the employee.
A redundancy is not genuine if the employee could reasonably have been redeployed either with the employer or with another business that is associated with the employer (such as in another entity owned by the same company).
Redeployment
Employers are required to make active attempts to redeploy an employee who is in danger of being made genuinely redundant. There is case law that examines when a redeployment may be reasonable, and what an employer’s redeployment obligations are.
It is not enough for an employer to simply help an employee find alternative employment, even if that employment is in the same company. For example, letting the employee know there are vacancies in the company that they can apply for will not satisfy an employer’s redeployment obligations.
An employer may also be required to consider redeploying an employee overseas and to consider whether the employee would be suitable for a new role after a reasonable training period. It does not necessarily matter whether the alternative role is inferior or involves less remuneration; it must generally still be considered.
Genuine redundancy and unfair dismissal
If a redundancy is genuine, the employee will not be able to bring a successful unfair dismissal claim against the employer.
Even in a case where the dismissal was not a genuine redundancy, it does not necessarily follow that the dismissal amounted to unfair dismissal. To find that a person was unfairly dismissed, the Fair Work Commission must be satisfied that the dismissal was harsh, unjust or unreasonable.
Am I entitled to redundancy pay?
If you are made genuinely redundant, you may be entitled to receive redundancy or severance pay. However, not all employees are entitled to redundancy pay. Employees who are not entitled to redundancy pay include employees who have been employed for less than 12 months, contract employees and casual employees.
If an employee is entitled to redundancy pay, the amount they are entitled to depends on how long they have been with your employer. It also depends on the terms of any modern award or enterprise agreement into which the employee has entered with the employer.
If an employer fails to pay redundancy pay to a person who is entitled to it, this is a breach of the legislation and may result in a civil penalty.
Employees who are not covered by the national system
While most employees in Australia are covered by the Fair Work Act 2009, some employees of state and local government departments and agencies are covered by state industrial relations legislation and not by the national system.
An employee who is not covered by the national system and who is made redundant will need to seek legal advice as to whether the redundancy was genuine and what entitlements they have under the industrial relations legislation that covers them.
If the redundancy is not genuine, the employee may be able to make a claim for unfair dismissal.
If you require legal advice or representation in any legal matter, please contact Taylor Rose.
