Co-authored by: Jenin Saji
- A redundancy occurs when a business no longer requires the position to be done by anyone in the business, or because the business has become insolvent or bankrupt.
- A redundancy is not genuine if the employer has not explored the option of redeployment in the employer’s business or the business of an associated entity of the employer.
- The circumstances surrounding the employee at the time of dismissal will impact whether redeployment is a reasonable option.
What is Genuine Redundancy and Redeployment?
A genuine redundancy is when the employee’s job can no longer be performed because of changes in the operational needs of the business. The redundancy must be made in compliance with the terms and conditions of a Modern Award or enterprise agreement. Most awards and enterprise agreements require employers to consult with employees prior to being made redundant.
Section 389 of the Fair Work Act 2009 (Cth) states that before an employee’s role has been made redundant, employers are required to consider whether their employee can be redeployed into another position within the business or an associated enterprise. The redeployment position includes consideration of a position that may involve less pay or an inferior position in the business.
In determining whether redeployment is reasonable several factors may be relevant, this includes:
- Whether there exists a role or position to which the employee can be redeployed.
- The qualifications, skills and competency required to perform the job.
- The location of the job in relation to the employee’s residence and the remuneration.
Redeployment to a lesser role or pay
Redeployment is not limited to a role that is similar to the existing position of the employee. Employers are able to offer a role that may be of a lesser position, or pay to the employee, and it is essential that employers do not withhold offering alternative positions as a result of a belief that the employee would be interested in such a role.
In the case where appropriate redeployment is offered to an employee and the employee refuses to accept the position, this may impact the amount of redundancy pay received from the employer.
Fair Work Commission
In determining whether a redundancy is genuine the Fair Work Commission must find on the balance of probabilities, there was a position within the employer’s business that would have been reasonable to redeploy the dismissed employee. The reasonableness of redeployment will depend on factors such as the nature of the business and the employee’s skills and qualifications.
The evidence as to whether there was a position available for the employee would also identify the steps taken by the employer to identify other work which could have been performed by the dismissed employee.
Examples of Redeployment in cases
In many cases, employers have failed to adequately follow the redeployment process and thus meet redeployment obligations. Often this common mistake has resulted in a finding that the employee was unfairly dismissed as the employer did not meet the genuine redundancy criteria. The consequences of failing to do so can be seen in the following cases:
In the case of Aldred v Hutchinson Pty Ltd , when considering redeployment, the employer had only considered the Victorian division of its enterprise. The employer did not follow the requirements of redeployment as the words in the act state that an employer must consider redeployment ‘In the employer’s enterprise or an associated entity’.
Instead, the employer had confined the options of redeployment to a particular geographic zone. Thus, the employer prevented possible redeployment opportunities as the employee could have been redeployed to another position. Thus, it was held that it was not a genuine redundancy, and the employee was successful in its claim that it had been unfairly dismissed.
Similarly, in another case titled Suridge v Boral Window Systems Pty Ltd T/A Dowell Windows  the employer had failed to comply with redeployment obligations. The employee’s job was outsourced to a labour hire agency to save costs, which led to the employee’s position being made redundant.
The employer in the redundancy process stated that there were no positions reasonably available to be offered to the employee and could be accepted. It was ultimately found that the employer had failed to explore redeployment options as there were other suitable positions available for the employee within the organisation. It was held that the dismissal was not a genuine redundancy and the employee succeeded in its claim.
The case of Harrison v Queensland University of Technology  emphasises the importance of consulting with employees prior to making them redundant. In this case, the employee’s position was made redundant when the subjects the employee had taught at the university were discontinued. It was held that the employer failed to adequately consult with the employee regarding the redundancy and had failed to meet redeployment obligations. Therefore, the redundancy was held to not be genuine and the employee succeeded in this unfair dismissal claim.
How can we help?
At Coutts, our friendly Employment Law team can assist you with your legal queries and concerns regarding redundancy, the process and obligations to be met. If you feel as though your redundancy is not genuine and your employer has not met redeployment obligations, our Coutts team are here to help.
Alternatively, if you are an employer considering making an employee redundant, Coutts can assist you to ensure that you meet your obligations and minimise the risk of a claim being made against you.
To find out more about your rights and if you require any further information on options regarding redundancy and redeployment, don’t hesitate to reach out to our Employment Law team.
ABOUT JENIN SAJI:
Jenin joined the Coutts team in September 2022, working as a Paralegal within the Commercial Law team, based in our Narellan and Campbelltown offices.
Jenin is in her third year of University and is studying a Bachelor of Laws/Bachelor of Communications (Social and Political Sciences) at the University of Technology Sydney.
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This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever to this blog, including all or any reliance on this blog or use or application of this blog by you.