Genuine redundancy; what is it?

Where the termination of the employment of an employee can be shown by an employer to be a “genuine redundancy”, which can only occur when the employer can satisfy the statutory elements constituting one, the affected employee or employees cannot pursue an unfair dismissal claim because the employer would have a jurisdictional defence.  Here is the classic definition of a genuine redundancy from a case.

“Consideration

[28] The first matter to be considered and determined by the Commission, is whether or not the Applicant’s dismissal was a case of genuine redundancy within the meaning of section 389 of the Act.

[29] On the evidence, it is clear that the Respondent did make changes within the business so that the functions or duties that the Applicant had been carrying out were redistributed to other employees.

[30] Previous decisions of this Commission, including the Full Bench decision in Ulan Coal Mines Limited v Henry Jon Howarth and others, have considered the question of the reorganisation of, or redistribution of, duties and whether this falls within the meaning of a genuine redundancy. 1 In this decision the Full Bench found as follows:

“[16] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:

“1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548 The following are possible examples of a change in the operational requirements of an enterprise: a machine is now available to do the job performed by the employee;

the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.”

[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” (at p. 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:

“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…” (at p.308)

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 Commissioner of Taxation (2004) 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.

[18] In Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job Previously performed by the applicant still exists.” (at par [27])”

[31] From the above, it is clear that a job is a collection of functions or duties done by a particular employee. Where there has been a reorganisation or redistribution of duties the employee may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by other employees. The test is whether the previous job has survived the restructure rather than whether the duties have survived in some form.

[32] In this case, the Applicant’s duties had been moved to other employees and so the particular job he had been doing was no longer required after this redistribution.

[33] I am satisfied on the evidence before the Commission, that the Applicant’s job was no longer required by the Respondent to be performed by anyone because of changes in the Respondent’s operational requirements.

[34] There is no suggestion that the Applicant’s employment was subject to a modern award or an enterprise agreement.

[35] With respect to whether it would have been reasonable in all the circumstances for the Applicant to have been redeployed the Respondent’s position is that there was no other suitable employment for him at the time. The evidence of the Applicant is that the Respondent continued to employ casuals to do work in the warehouse that he was capable of doing because he had extensive experience in all facets of these roles.

[36] The case law on the issue of redeployment requires that there must be an evidentiary basis for the Commission to find that there was in existence, at the time, a job or a position or other work to which the employee could have been redeployed.  2

[37] In this case, the Applicant’s evidence was not that there was a vacant job or position but rather there was work being done in the warehouse that he was capable of doing which was being done by casual employees. It is however the Respondent’s decision as to how it staffs its operation. There was no requirement in this case for the Respondent to end the employment of casual employees in order to create a vacancy which would then be offered to the Applicant as redeployment.

[38] In all the circumstances, I do not accept that it would have been reasonable for the Applicant to have been redeployed.

Conclusion

[39] I am satisfied on the evidence that the dismissal of the Applicant was a case of genuine redundancy within the meaning of section 389 of the Act.

[40] Consequently, by virtue of section 385 of the Act, the Applicant is not a person who has been unfairly dismissed.

Turley v David Moss Corporation Pty Ltd – [2021] FWC 377 – 28 January 2021 – Williams C