The redundancy defence to an unfair dismissal case

These passages from a recent unfair dismissal case constitute an excelelent summary of the provisions of the Fair Work Act which render a genuine redundancy a complete jurisdictional defence to an unfair dismisal case.

“Genuine Redundancy

[22] Genuine redundancy is a complete defence to an unfair dismissal application. If the

dismissal was a case of genuine redundancy as defined in s.389 of the FW Act, then the

dismissal cannot be an unfair dismissal under s.385:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC 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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see

section 388.”

[Emphasis added]

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed

by anyone because of changes in the operational requirements of the employer’s

enterprise; and

(b) the employer has complied with any obligation in a modern award or

enterprise agreement that applied to the employment to consult about the

redundancy.

(2) 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:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[2023] FWC 1992

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[23] The explanatory memorandum to the FW Act includes the following informative

summary:

“Clause 389 – Meaning of genuine redundancy

  1. This clause sets out what will and will not constitute a genuine redundancy. If a

dismissal is a genuine redundancy it will not be an unfair dismissal.

  1. 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.

  1. 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.

  1. It is intended that a dismissal will be a case of genuine redundancy even if the

changes in the employer’s operational requirements relate only to a part of the

employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

  1. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an

employer does not comply with any relevant obligation in a modern award or enterprise

agreement to consult about the redundancy. This does not impose an absolute obligation

on an employer to consult about the redundancy but requires the employer to fulfil

obligations under an award or agreement if the dismissal is to be considered a genuine

redundancy.

  1. Subclause 389(2) provides that a dismissal is 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 within the enterprise of an associated entity of the

employer (as defined in clause 12).

  1. There may be many reasons why it would not be reasonable for a person to be

redeployed. For instance, the employer could be a small business employer where there

is no opportunity for redeployment or there may be no positions available for which the

employee has suitable qualifications or experience.

  1. Whether a dismissal is a genuine redundancy does not go to the process for

selecting individual employees for redundancy. However, if the reason a person is

selected for redundancy is one of the prohibited reasons covered by the general

protections in Part 3-1 then the person will be able to bring an action under that Part in

relation to the dismissal.”

[2023] FWC 1992

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[Emphasis added]

[24] I am required to decide whether the dismissal was a case of genuine redundancy before

considering the merits of the application (per s.396).

[25] Section 389 requires a series of stepped findings:

(a) firstly, whether Ms Kang’s job is redundant;

(b) secondly whether the employer complied with any applicable consultation obligations

under a modern award or agreement; and

(c) thirdly whether it would have been reasonable to redeploy Ms Kang in another role.

[26] There must be an appropriate evidentiary basis for these stepped findings and the

relevant facts are usually particularly within the knowledge of the employer respondent rather

than the dismissed applicant.

Was the Applicant’s “job” made redundant?

[27] Section 389(1)(a) of the FW Act refers to an employer making a decision about an

employee’s “job”. A job involves a collection of functions, duties and responsibilities entrusted,

as part of the scheme of the employees’ organisation, to a particular employee.

[28] The test is not whether the functions or duties themselves continue, but whether the

“job” itself survives. What is said to be critical for the purpose of identifying a redundancy is

whether the employee has any duties left to discharge after the re-organisation. If there is no

longer any function or duty to be performed by that employee, his or her “job” is redundant.

[29] In this matter Ms Kang’s duties and functions continued – Casio watchers are still being

distributed but the jobs or positions of five storeworkers were made redundant. The employer

decided that it no longer required the jobs of five storeworkers to be done by anyone.

[30] I am satisfied that the first element in s.389 is satisfied insofar as Shriro Australia has

decided that it no longer requires Ms Kang’s job to be performed by anyone because of changes

in the operational requirements of the employer’s enterprise.

Compliance with consultation requirements

[31] Shriro Australia accepted that Ms Kang’s employment was covered by the Storage

Services and Wholesale Award 2020. I am satisfied that Shriro Australia complied with the

consultation requirements under that award. Ms Kang and her peers were all told of Shriro

Australia’s need to restructure, Shriro Australia held meetings in relation to the restructure, and

called for volunteers. Once Shriro Australia had identified Ms Kang’s position to be

involuntarily redundancy it consulted with her individually.

Reasonableness to redeploy

[32] I am also satisfied that it would not have been reasonable to redeploy Ms Kang. Ms

Stuart’s evidence was that three roles were identified as redeployment opportunities: HR

business support, marketing manager for the Seasonal Division and IT business analyst. Ms

Kang did not have the skills or experience to be deployed to any of these roles.

[2023] FWC 1992

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[33] Overall I am satisfied that Ms Kang’s dismissal was a genuine redundancy as defined

in s.389. Therefore Ms Kang’s dismissal cannot be an unfair dismissal and Ms Kang’s claim

cannot continue.

Final Observations

[34] Throughout the proceedings Shriro Australia made it very clear that Ms Kang was a

well-liked and highly regarded employee – which is to Ms Kang’s credit. Shriro Australia’s

decision to discontinue its appliances division and make 5 of 20 warehouse positions at Chullora

redundant had nothing to do with Ms Kang’s work performance, Ms Kang’s conduct at work,

her injury or that she did not have a forklift licence.

[35] Shriro Australia called for volunteers and then needed to make one position

involuntarily redundant. Ms Kang’s case centred upon on Ms Kang being selected for

redundancy instead of other employees. It is well established by many decisions of the

Commission and its predecessors that if the genuine redundancy exclusion applies then the

fairness or unfairness of selection for redundancy cannot be challenged in the unfair dismissal

jurisdiction. It is unfortunate that Ms Kang lost her job however the dismissal was not an unfair

dismissal under the Fair Work Act 2009 (Cth).

[36] I have separately made an order that Ms Kang’s application is dismissed (PR765059)”

 

Kang v Shriro Australia Pty Limited [2023] FWC 1992 delivered 10 August 2023 per Easton DP