Redundancy and JobKeeper

It's time to lodge your monthly JobKeeper declaration - Juggernaut Advisory

Here is an extract from a recent decision of the Fair Work Commission dealing with the relationship between JobKeeper and redundancies.

“A job is a collection of duties and tasks performed by an employee. In determining a job is redundant, it is necessary to draw a distinction between the employee’s job and the employee’s duties. 2 A dismissal may be a redundancy within the meaning in s. 389(1)(a) of the Act in a number of circumstances including where the duties remain and operational changes result in fewer employees being required to perform those duties.3 A dismissal may be a redundancy within the meaning in s. 389(1)(a) of the Act in a number of circumstances including where the duties performed by an employee remain and are distributed to other employees so that overall, fewer employees are required in the workplace.

The effect of s. 389 of the Act is that where that where all requirements in the section are met and a dismissal is a genuine redundancy within the meaning of the section, an employee who is dismissed as a result of his or her job being made redundant is not protected from unfair dismissal. In short, where an employer complies with s. 389 of the Act, the employer has a complete defence to an unfair dismissal application. Failure to comply with one or more of the obligations does not mean that a particular position is not genuinely redundant in the sense that the redundancy is bona fide on the basis that the employer no longer requires a job to be performed. For example, a failure to consult or to reasonably redeploy the employee whose job is redundant may result in a finding of unfair dismissal. However in circumstances where a failure to consult would not have changed the outcome the remedy may be limited to compensation for a reasonable period in which consultation could have occurred.

The JobKeeper subsidy is not a mechanism by which employers are required to keep employees in employment until the COVID-19 Pandemic subsides and/or the JobKeeper scheme ceases, in circumstances where their jobs are, or become redundant. The circumstances during the COVID-19 Pandemic are evolving rapidly as employers position their enterprises to survive. While JobKeeper payments may significantly subsidise wages they do not cover all costs of maintaining an employee in employment. An employer is entitled to make a decision that a job is not sustainable and will not be sustainable when the Pandemic subsides and to make that position redundant, regardless of the eligibility of the employer or the employee in the job, to receive JobKeeper payments. The mere fact that an employer has claimed JobKeeper payments for an employee at some point does not entitle that employee to remain employed in circumstances where the employee’s job is or becomes redundant.”

Bakker v ICE CAP PTY LTD  [2020] FWC 6344 delivered 27 November 2020 per Asbury DP