Redundancy defence requirements for unfair dismissal

 

When an employer endeavours to rely upon the jurisdictional defence to an unfair dismissal claim that the termination of employment arose as a genuine redundancy, amongst other things the employer must demonstrate that it undertook and met the consultation obligations of any applicable enterprise agreement or modern award. And this is not token endeavour as the following case decision reveals.

 

“Did the Respondent comply with any obligation in a modern award or enterprise

agreement that applied to the employment to consult about the redundancy? (s.389(1)(b))

 

[25] The statutory requirement under s.389(1)(b) requires a finding of fact, whereby the

section “is not made out unless the various requirements of the relevant consultation clause are

demonstrably discharged by the employer”.

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[26] The parties accept that the Thales Australia Maritime Enterprise Agreement 2019

(Agreement) applied to the Applicant at the time of his dismissal. Clause 54 “Redundancy” of

the Agreement sets out extensive consultation obligations upon the Respondent in the event of

a redundancy.

[27] Both parties put on extensive evidence and submissions as to whether the Respondent

complied with Clause 54 in effecting the Applicant’s redundancy.20

[2023] FWC 594

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[28] During cross-examination, both Mr Farrow and Ms Alex Gardener (HR Business

Partner) made various concessions (or admissions) as to the Respondent’s failure to comply

with Clause 54 of the Agreement.21 Having regard to those concessions, the plain meaning of

the words set out in clause 54 of the Agreement, and the case law that outlines the general

principles for genuine consultation to have been found to have occurred (as summarised in the

Applicant’s submissions),22 I do not accept that I am in a position to find that the Respondent

has complied with its consultation obligations under Clause 54 of the Agreement.

[29] I find that the evidence discloses that, in effecting the Applicant’s dismissal for reasons

of redundancy, the Respondent did not comply with its obligations under the Agreement to

consult about redundancy. I thus find that the Respondent has not satisfied s.389(1)(b) of the

Act.

Would it have been reasonable in all the circumstances for the Applicant to have been

redeployed within the Respondent’s enterprise? (s.389(2))

[30] Sub-section 389(2) of the Act provides that a person’s dismissal cannot be a case of

genuine redundancy if it would have been reasonable in all of the circumstances for the person

to have been redeployed within the employer’s enterprise, or an associated entity of the

employer.

[31] The highest binding interpretation of s.389(2) remains that stated in Ulan Coal Mines

Limited v A. Honeysett & Ors23 (Honeysett):

“[26] [Subsection 389(2)] must be seen in its full context. It only applies when there has

been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if

the dismissal was a genuine redundancy. In other words, if the dismissal is a case of

genuine redundancy the employer has a complete defence to the application. Section

389(2) places a limitation on the employer’s capacity to mount such a defence. The

defence is not available if it would have been reasonable to redeploy the employee. The

exclusion poses a hypothetical question which must be answered by reference to all of

the relevant circumstances.

[28] … [T]he question posed by s.389(2), whether redeployment would have been

reasonable, is to be applied at the time of the dismissal. If an employee dismissed for

redundancy obtains employment within an associated entity of the employer sometime

after the termination, that fact may be relevant in deciding whether redeployment would

have been reasonable. But it is not determinative. The question remains whether

redeployment within the employer’s enterprise or the enterprise of an associated entity

would have been reasonable at the time of dismissal. In answering that question a

number of matters are capable of being relevant. They include the nature of any

available position, the qualifications required to perform the job, the employee’s skills,

qualifications and experience, the location of the job in relation to the employee’s

residence and the remuneration which is offered”.

(emphasis added)

[2023] FWC 594

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[32] It can been seen from the foregoing extract from Honeysett, that the reasonableness of

redeployment for the purposes of s 389(2) of the Act is to be assessed as at the time of the

relevant dismissal.24 Further, in assessing the reasonableness of redeployment, it is necessary

to identify the position or other work to which the employee could have been redeployed,25 and

determine whether that position or other work is, for want of a better term ‘the right fit’ (or

reasonable) for both the employer and the employee. Relevantly, s.389(2) of the Act does not:

  1. a) interfere with the right or ability of an employer to require that the selection criteria

(as to skills, qualifications or experience) for a relevant vacant position be met by

an employee seeking to be redeployed;

  1. b) require an employer to fit a square peg into a round hole. In other words, simply

because a vacant position exists at the time of an employee’s dismissal

(redundancy), does not mean that an employer is required to bend, twist, ignore,

delete, water down or otherwise amend selection criteria so as to enable the

redeployment (of such redundant employee) to occur; or

  1. c) create an obligation upon an employer to redeploy an employee into a role that the

employer does not accept is suitable (i.e. because the employee does not hold the

requisite skills, qualifications and/or experience that the employer requires). Indeed,

such an obligation could hardly be said to be reasonable.

[33] The conclusions of the Full Bench in Teterin v Resource Pacific Pty Ltd t/a Ravensworth

Underground Mine26, as to the interaction between s.389(2) and s.385(d) of the Act, are also

worth drawing attention to, as follows:

“The manner in which the Deputy President expressed his conclusions may be justified

by reference to s.385(d), which requires that for a person to have been unfairly

dismissed, the Commission must be satisfied that the dismissal was not a case of

genuine redundancy. It must follow that the applicant in an unfair dismissal case bears

the risk of failure if the state of satisfaction required by s.385(d) cannot be reached. If

the Deputy President considered the evidence insufficient to allow him to determine

whether redeployment was reasonable under s.389(2), then (there being no issue with

respect to the s.389(1) matters) he could not be satisfied that the dismissals were not

genuine redundancies, meaning that the applications before him had to be dismissed.”

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[34] Similarly, in Jain v Infosys Ltd28, the Full Bench said:

“… in the context of the question whether a dismissal was an unfair dismissal in which

there is also agitated whether the dismissal was a case of genuine redundancy, to the

extent that there is a legal onus of proof or something analogous thereto, it rests with the

applicant in the sense that the applicant bears the risk of failure if the satisfaction

required by s.385 including paragraph (d) is not reached.”

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[35] In my view, the evidence before me is insufficient to determine (in the positive sense)

that it would have been reasonable (or unreasonable) in all the circumstances for the Applicant

to have been redeployed within the Respondent’s enterprise. In reaching this conclusion, I note:

[2023] FWC 594

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  1. a) the evidence of Ms Gardner that the Respondent did not “actively” take steps to

redeploy the Applicant (beyond providing him with a “list of opportunities” (absent

any detail as to those opportunities) that he could self-assess and apply for);30 and

  1. b) the Applicant’s failure to identify (by way of evidence or submissions) the specific

position/s or role/s that he says it would have been reasonable in all the

circumstances for him to be redeployed into.

[36] Given my finding that the Respondent has failed to comply with s.389(1)(b) of the Act,

it is unnecessary that I make a finding in respect of s.389(2) of the Act, albeit, the issue will

likely loom large in the merits hearing of the Application.

Summary of findings

[37] Having regard to the evidence and submissions of the parties, I make the following

conclusions:

(a) As at the time that the Respondent made the decision to make the Applicant’s

MHS role redundant, this job was genuinely no longer required to be performed by

anyone because of changes in the operational requirements of the Respondent’s

enterprise (s.389(1)(a) of the Act).

(b) The Respondent has not satisfied its obligations as to consultation under the

Agreement (s.389(1)(b) of the Act).

(c) The state of the evidence does not enable me to make a finding as to whether it

would have been reasonable in all of the circumstances for the Applicant to have been

redeployed within the Respondent’s enterprise (s.389(2) of the Act).

(d) On the basis of my finding in (b) above, the Applicant’s dismissal was not a

“genuine redundancy” within the meaning of s.389 of the Act.31 Whilst I make no

finding at this stage of the proceedings, I note that a dismissal may still be classified as

a ‘redundancy’ even if it not be a “genuine redundancy” within the meaning of the fair

work legislation.

Conclusion

[38] The Respondent has failed to make good its case as to genuine redundancy. The

Respondent’s objection in this regard is therefore dismissed. An order to this effect will follow

the publication of this decision, and the matter will be listed for directions to program the matter

for a merits hearing.”

 

 

Parkinson v Thales Australia Ltd – [2023] FWC 594 delivered 13 March 2023 per Boyce DP