Unfair dismissal cases and the redundancy defence

This extract from an unfair dismissal decision by the Fair Work Commission analyzes some of the legal issues which arise when an employer seeks to defend the claim on the basis of genuine redundancy.

“Was the dismissal a case of genuine redundancy?

[47] Section 389(1) of the Act sets out the meaning of genuine redundancy and relevantly states as follows:

“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”

[48]  Section 389(2) of the Act provides for an exclusion to that which would otherwise fall within the definition of genuine redundancy and relevantly states as follows:

“(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.”

Was the Applicant’s job no longer required – s.389(1)(a)?

[49] In determining whether the Applicant’s dismissal was a genuine redundancy I turn firstly to consider whether the Respondent no longer required the Applicant’s job to be performed by anyone because of the operational requirements of the Respondent.

[50] A Full bench considered the meaning of the term genuine redundancy in Ulan Coal Mines Limited v Henry John Howarth and others 82 (Ulan) and relevantly stated as follows:

“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly created positions. In these circumstances, it was said that:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.

[18] In Kekeris v A. Hartrodt Australia Pty Ltd Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” 83 (references omitted)

[51] It follows from the Full Bench’s reasoning in Ulan and the summary of relevant cases cited in their decision that:

(i) A job is a collection of functions, duties and responsibilities assigned to a particular employee within an organisation;

(ii) The functions, duties and responsibilities may cease to be part of an employee’s job through a reorganisation or redistribution of duties;

(iii) Should there no longer be any functions or duties to be performed by a particular employee, then his or her job ceases to exist;

(iv) The fact that the tasks and duties previously performed by an employee may have survived and been reallocated to other employees through a restructure does not mean the job is still required; and

(v) An employee’s dismissal may be a genuine redundancy even though particular functions, duties and responsibilities previously performed by that employee are being performed by other employees.

[52] It is factually uncontroversial that the Graphics Manager role formerly held by the Applicant was removed as a consequence of the restructure initiated by the Respondent. The evidence of the Respondent’s witnesses confirmed that the former duties of the Graphics Manager role were absorbed into other roles including the Customer Care Officer, National Sales & Customer Engagement Manager, Financial Controller and the remaining graphics design roles. The restructure was not however confined to the removal of the Applicant’s role although he was the only staff member to be made redundant at the time of the removal of his role. The restructure also involved the consolidation of three management roles into one and the combining of two former departments, sales and customer care, into one department reporting to Ms McGregor as National Sales & Customer Engagement Manager.

[53] As earlier set out in the evidence above at [17], the Applicant readily agreed that the role of Graphics Manager no longer exists and the various duties of that role are now discharged by other staff. Consistent with the authorities I have set out above, the fact that the tasks and duties previously performed by the Applicant have survived and been reallocated to other staff does not mean the job is still required.

[54] It follows from the above, and I am satisfied that, the role of Graphics Manager previously held by the Applicant is no longer required by the Respondent due to changes in the Respondent’s operational requirements. I now turn to consider whether the Respondent complied with any consultation obligations that were required to be observed by it.”

Spaull v Matthews Bronze Unit Trust (2022) FWC 2870 26 October 2022 per Masson DP