Fair Work redundancy concepts

Under s.389(1) of the Fair Work Act, a person’s dismissal is a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

The extract from a recent Fair Work Commission unfair dismissal case explains this concept.

“Was the dismissal a case of genuine redundancy?

[31] The Respondent contends that the dismissal was a “genuine redundancy” within the meaning of s.389 of the FW Act. If that contention is correct, then a dismissal will not be an “unfair dismissal” under s.385, because an essential condition under s.385(d) – which is that the dismissal must not be a case of genuine redundancy – could not be satisfied.

[32] Under s.389(1) of the FW Act, a person’s dismissal is a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[33] However, by section 389(2) of the FW Act, a person’s dismissal will not be a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to have been redeployed with the employer’s enterprise or within an associated enterprise.

Section 389(1)(a) criteria

[34] As to the first criteria in s.389(1), an oft-cited explanation of the operation of that section was given by a Full Bench in Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32 as follows:

“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” Jones v Department of Energy and Minerals (at 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that (at 308):

What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Federal Commissioner of Taxation (2004) 136 FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.”

[35] I am satisfied that the Respondent no longer required the Applicant’s job to be performed by anyone, because of changes in the operational requirements of the Respondent, wherein the Applicant’s position was eliminated and her duties were redistributed. The objective of that restructure was to reduce costs by the elimination of a full-time teaching position while continuing to meet its teaching requirements. I have set out those matters above in further detail, which I will not repeat here.

[36] I would note for completeness that the Applicant submitted various materials after the hearing of the matter that sought to demonstrate by more recent events that a redundancy was not required. That material was late with no apparent explanation, leave was not sought for it, and none of it was put to Mr Schyer. Putting those matters aside, that material also appears to refer to events occurring (as best as I can discern them) some months after the Applicant’s employment was terminated. If that material was intended to somehow reflect the ‘true’ commercial circumstances on the Applicant at the time of her dismissal, I do not accept it.

[37] In terms, I am satisfied that the requirements of s.389(1)(a) were established.”

Extract from Baker v AS Colour Pty Ltd (2023) FWC 140 19 January 2023 per Millhouse DP