Redundancy in Australia; the concept of redeployment

For the termination of the employment of an employee to constitute a genuine redundancy, and thus be a complete jurisdictional defence to an unfair dismissal claim against the employer, the Fair Work Act requires the employer to be able to make out several propositions, two of which have been dealt with in the past two posts.

The third is found in  sub-sec 389(2) of the Fair Work Act which provides that a person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

Here is the concept summarized in a recent decision of the Fair Work Commission.

“Redeployment

[82] In Ulan Coal v Howarth, the Full Bench set out the obligations on an employer in regard to redeployment under s 389(2)(b) of the Act. At [27], [28] and [34] the Full Bench said:

‘[27] Secondly, it is implicit in the terms of s.389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.

[28] Thirdly, the 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 some time 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.

[34] It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.’

[83] In Technical and Further Education Commission t/a TAFE NSW v Pykett [2014] FWCFB 714, a Full Bench of the Commission held:

‘[36] We have earlier set out the submissions of the appellant and the respondent as to the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the respondent’s submissions. For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding. Such an interpretation is consistent with the ordinary and natural meaning of the words in the subsection; the Explanatory Memorandum and Full Bench authority. We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:

(i) that the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;

(ii) whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and

(iii) whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.’

[84] It is unarguable (and I do not understand the applicant to dispute it) due to the operational needs of the Project, indeed the reality of any construction project (and ipso facto its service providers, including Greyhound), that the work available for bus drivers had gradually reduced (ultimately to nil) and the full fleet of driver’s jobs could not be sustained; put simply, less work means fewer jobs. This scenario is entirely consistent with the example in the Explanatory Memorandum where it is said:

‘The employers’ business is experiencing a downturn and therefore the employer needs three people to do a particular task or duty instead of five’

[85] This was made clear by Hatcher VP in Low at [15]:

‘It is well established that the fact that the duties of a particular job or position which has been abolished have been re-allocated to another position or positions as part of an employer’s restructure does not alter the fact that the employer no longer requires that position or job to be performed by anyone. 1 Here, Menzies had two positions of Workplace Injury and Return to Work Coordinator. It has decided to abolish one of those positions, and have the holder of the remaining position perform all of the work previously done by both the position holders. That is a situation which falls squarely into s.389(1)(a).’,

and relevantly explained in Deeney where Bull DP, in a similar set of circumstances, said at [75]:

‘It cannot be seriously argued that the applicants’ positions were not made redundant due to the operational requirements of the respondent following an instruction from the client. The construction of an LNG plant on Barrow Island for the Gorgon Project is self-evidently work which would require an increase to and eventually a decrease in manning levels, the only question is the timing of these fluctuations which is in the control of the respondent’s principle who provides the respondent with instructions regarding their Schedule of Works and the employee numbers it is prepared to fund.’

[86] In this case, the employer needed 17 drivers to perform the driving tasks, instead of 21. In my view, this is a classic example of redundancy, even without the obvious conclusion that such circumstances are a well-accepted and understood outcome on any new construction project. In one sense, it is beside the point whether the applicant’s employment came to end at the initiative of Chevron or Greyhound, although the practical and legal reality was that the employment relationship between the applicant and Greyhound and its consequences were the result of circumstances entirely beyond Greyhound’s control.

[87] Accordingly, I am satisfied that s 389(1)(a) of the Act has been established.

[88] In respect to consultation, I agree that not all redundancy circumstances will require consultation in the ordinary sense as explained in the authorities. In the specific circumstances of a new construction project, there is an underpinning inevitability which is commonly understood and accepted by all parties as a natural phenomenon in the industry. For a bus driver, the reduced construction workforce would be plainly obvious by falling worker passenger numbers. No amount of consultation will likely result in changing the natural course of this inevitability, save of course for any redeployment options at another site or project of the employer.

[89] That said, I do not accept the applicant was not aware of her imminent demobilisation. She had been involved (though not selected) in numerous demobilisations at this site, and at least two other locations where she had previously worked. While the actual process is relatively short, from a Toolbox meeting, placement on a WAM roster and demobilisation meeting, no employee could reasonably complain of being taken by surprise by the process, or denied an opportunity to suggest alternative redeployment (although I accept that the employer will likely be the only one who is aware of such opportunities). In any event, an analysis of the authorities; see: McCormick v Mt Pleasant Stud Farm Pty Limited [2015] FWC 6360, make plain that a failure to properly consult (or to consult at all), where the other factors in s 389 have been satisfied, and the dismissal is found to be unfair pursuant to s 387 of the Act, will invariably only result in a compensation order of an amount that would have been made, had proper consultation occurred, over a short period – that is, one or two weeks’ pay. In any event, the Commission need not get to consideration of the merits of this application, as the Commission’s jurisdiction is not enlivened.

[90] Accordingly, I find that s 389(1)(b) of the Act has been complied with, given the peculiarities of the new project industry and its service providers during the construction phase.

Redeployment

[91] The uncontested evidence of Ms Ismail was that in June 2019, when exploring alternative employment opportunities for demobilised drivers, she became aware of four positions in Gladstone. This opportunity did not materialise. I am satisfied that Greyhound managers were actively looking for alternative work for drivers in the demobilisation round affecting the applicant. However, given that Greyhound had no other contracts in Western Australia and had been unsuccessful in bidding for ongoing contracts on the Chevron project, it would not have been reasonable to redeploy the applicant within Greyhound’s enterprise.

[92] Accordingly, s 389(2) of the Act has also been satisfied.”

McRae v Greyhound Australia (2020) FWC 1868 delivered 28 April 2020 per Sams DP