A recent case before the High Court has clarified the required answer to a contentious question; Does a business undergoing a restructure have to offer redundant staff positions already held by external contractors?
Case Review
In this case a mining company was undergoing a restructure during which a number of employees were made redundant.
As is required by law the company investigated reasonable redeployment options that were available and where appropriate redeployed those employees into the available roles.
“There is no question about the need to follow the reasonable redeployment process. What is at issue with this case is the notion of what is an ‘available’ role”, explains ACAPMAs Elisha Radwanowski.
22 workers came together to claim that they should have been offered redeployment into roles that the company had engaged external contract workers to fulfill.
The company argued that those roles were not available because they were filled by the contractors currently performing them.
The case was heard four times as it progressed through the Fair Work Commission and into the High Court on appeal.
In the first case the finding was that the company should have considered any role held by an external contractor as a potential reasonable redeployment.
This first hearing was appealed and overturned.
The case was then appealed again where it was determined once again that an interpretation of the intent behind Section 389 of the Fair Work Act requires businesses going through a restructure to consider any role held by an external contractor as a potential reasonable redeployment option.
Following this latest appeal the answer is clear;
Yes. If a business is going through a restructure it must consider any position currently held by an external contractor when it is assessing reasonable redeployment options.
Learnings for all businesses
“While the court acknowledged that this requirement to consider positions held by external contractors is not a guarantee of redeployment, and that there are broad circumstances that must be considered in context when it comes to determining the reasonableness of a redeployment, it did note that it is clear that all businesses must start from a position of including external contractor held positions in the list of positions that are assessed for reasonableness. There is, after four different court cases challenging this interpretation from every angle, little doubt left in the firmness of the requirement”, explains Elisha.
“So while it might be considered an unreasonable redeployment, due to the nature of the work, the pay, the location, the skills of the employee or due to known changes in the business, the external contractor held roles must be assessed when looking for redeployment options for redundant staff”, concluded Elisha.
Here To Help
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by emailing employment@acapma.com.au to get in contact with one of ACAPMA Workplace Relations Professionals, its free for members.
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Elisha Radwanowski BCom(HRM&IR)
ACAPMA
