A recent case has clarified the extent to which an employer is required to investigate alternative roles for workers whose position is made redundant due to restructure, answering the question of whether a business is required to redeploy redundant staff into positions done by on-employee contractors, and raising broader questions about the implications on positions held by casuals.
Case Review
The case, bought by employees of a mine whose positions were made redundant, hinged around a question of to what extent the business is required to assess whether the employees facing redundancy could replace non-employee contractors engaged within the business.
The employees argued that they should have the right to expect the business to place them in roles that non-employee contractors currently held as part of the ‘reasonable redeployment’ requriements of a redundancy.
Twice the Commission ruled that the dismissals were unfair because the business should have redeployed the employees into the non-employee contractor roles, or at the very least should have explored this option with rigour.
The business further appealed to the Federal Court for a judicial review of the case.
In upholding the Commissions decision that the business had a responsibility to redeploy, or at the least explore redeployment, of the employees to the non-employee contractor roles the Court noted;
“The fact that there might be some barrier that makes redeployment more difficult or more involved than it otherwise could be – whether that barrier takes the form of a need for retraining or, as here, the pre existing occupation of roles by contractors – is not to the point.
“Whether redeployment ‘would have been reasonable in all [of] the circumstances’ requires analysis of what an employer could have done apart from dismissing the employee.
“That being so, the immediate unavailability of a position to which a redundant employee could conveniently have been redeployed does not necessarily inoculate an employer against a charge that a dismissal was ‘not a case of genuine redundancy’.
“Naturally, it is a circumstance that, in any given case, might well favour a conclusion that redeployment would not have been reasonable.
“Whether that is so, however, will depend upon ‘all [of] the circumstances’.”
Learnings for all Businesses
“Restructure is a time that is fraught for businesses, particularly small and medium businesses. While there is a clear requirement around consultation, notice and redundancy payments, the area of ‘reasonable redeployment’ is one that has long been an area of confusion”, explains ACAPMAs Elisha Radwanowski.
“We are often asked by members ‘what is reasonable’. This case draws a clear point around positions held by non-employee contractors. It is clear now that any such positions must be considered and explored when reviewing the business for reasonable redeployment options”.
“What is now not clear is how far the reasoning in this cases goes. If it is considered reasonable to redeploy a redundant employee into a position being undertaken by a non-employee contractor, is it therefore reasonable to redeploy a redundant employee into a position that is held by one or more casual employees?”, continued Elisha.
“While this secondary question was not the central tenant of the case, and would no doubt result in complexity for the casual staff, this is a question that is being asked. The takehome for all businesses is that when it comes to restructure it is not simply a process of crossing out positions on an org chart and paying redundancies, the business must take the time to assess, and where possible remove, the barriers to the redundant employees being retained, including retraining and other labour force measures”, concluded Elisha.
Here To Help
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Elisha Radwanowski BCom(HRM&IR)
ACAPMA
