Redundancy masterclass Part 1; the role of a genuine redundancy in unfair dismissals

The Fair Work Act provides that a person is regarded as having been unfairly dismissed if the Fair Work Commission is satisfied that
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.(sec 389)
The alert reader will notice that the elements in (a)- (d) are conjunctive, that is to say they must all be satisfied before the Commission may conclude that a dismissal has been relevantly unfair to attract a potential unfair dismissal remedy.
Under sec 387 of the Act here is set out a number of matters which the Commission must take into account in considering whether a dismissal was harsh unjust or unreasonable. (The use of “or” is said to be disjunctive.)
They include (a) “whether there was a valid reason for the dismissal related to the person’s capacity or conduct………………………” and (h) “any other matters that the Commission considers relevant.”
Now it is at once apparent that a dismissal which is a case of genuine redundancy cannot constitute an unfair dismissal to attract the Commission’s jurisdiction to order a remedy, since the Commission must according to sec 389 be satisfied that each of the requirements has been met.
However, what are the implications for an employer who has a surplusage of employees to genuine operational requirements (and thus has a genuine redundancy or genuine redundancies looming) and must somehow choose which jobs are to become redundant and thus choose between more than a single employee? Can the Commission take into account the process of selecting an individual in an unfair dismissal case?
In UES (Int’) Pty Ltd v Harvey (2012) FWA FB 5241 the Full Bench said this
“The terms of s.389 of the FW Act suggest the process for selecting individual employees for redundancy is not relevant to whether a dismissal was a case of genuine redundancy. The relevant Explanatory Memorandum confirms as much. Setting aside jurisdictional pre-requisites and the matters in s.396(a) to (c), FWA only needs to consider s.387(a) concerning whether there was a valid reason for a person’s dismissal related to the person’s capacity or conduct if one or more of the criteria in s.389 of the FW Act, which sets out the meaning of genuine redundancy, have not been met. The criteria in s.389 which have not been met can be taken into account in FWA’s consideration as to whether the dismissal was harsh, unjust or unreasonable as part of s.387(h), being “any other matters that FWA considers relevant”
We think it unlikely that it was intended that FWA’s consideration of whether there was a valid reason for the dismissal related to the person’s capacity or conduct would extend to the process for selecting the person for redundancy when:
(i) the process for selecting a person for redundancy is not relevant to FWA’s determination of an unfair dismissal remedy application if the s.389 criteria for a case of genuine redundancy are met, and
(ii) any unmet criteria in s.389 of the FW Act can be taken into account as part of s.387(h) in FWA’s consideration as to whether the dismissal was harsh, unjust or unreasonable.
To conclude otherwise would mean that where an employer met the s.389 criteria for a genuine redundancy the process for selecting the person for redundancy would not be a matter FWA would consider in respect of an unfair dismissal remedy application. However (unless the application was otherwise determined) an employer who did not meet the s.389 criteria because, for example, they failed to consult as required by s.389(b) of the FW Act would have both the failure to consult and the process for selecting the person for redundancy considered in any unfair dismissal remedy application.”
This case would appear to definitively lay down that that there is no room for the Commission in an unfair dismissal case to take a look at whether there was a valid reason for a dismissal related to an employee’s capacity or conduct if the employer has otherwise satisfied the requirements of showing that the dismissal resulted from a genuine redundancy under sec 389. And there is no surprise there.
But what of the legal situation where the employer concludes, quite properly on operational or other legitimate grounds, that there is an excess of employees to jobs? How must the employee go about making that decision? This is a topic I will address in a forthcoming post.