What is a genuine redundancy?

 

Here is an excellent summary of the statutory elements of a genuine redundancy under the Fair Work Act.

“Genuine Redundancy” under the FW Act

[14] If a dismissal is “a case of genuine redundancy” as defined in s. 389 of the FW Act, the employer has a complete defence to an unfair dismissal application5 and the Commission has no jurisdiction to deal with the question of whether the dismissal was unfair. Section 389 provides 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.

(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.”

[15] An employer seeking to rely on the genuine redundancy exclusion would ordinarily be expected to adduce evidence as to the following matters:

  • 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;
  • 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
  • Whether there was a job or position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all of the circumstances to redeploy the dismissed employee.6

[16] These matters are generally within the knowledge of the employer seeking to establish the exclusion. Where an employee leads evidence that the dismissal is not a case of genuine redundancy, the employer’s evidence needs to be sufficient to rebut any evidence from the dismissed employee to the contrary.

[17] To determine whether the duties performed by a person in a particular role or position are no longer required to be performed by anyone because of changes in the employer’s operational requirements, it is necessary to draw a distinction between the employee’s job and the employee’s duties.7 A dismissal may be a redundancy within the meaning in s. 389(1)(a) of the Act in circumstances including where:

  • the duties remain and operational changes result in fewer employees being required to perform those duties;8
  • all or some aspects of an employee’s duties are performed by someone else as a result of operational change;9or
  • structural change has eliminated the need for specific duties or the employer has found another way to have those duties performed;10

[18] From the perspective of the dismissed employee, the important distinction between a job and the duties that comprise the job is often lost in circumstances where the duties of the dismissed employee are being done by others who remain in employment or are being done in a different way. While the terminology used in the legislation has a long history and a settled meaning, it is apt confuse, particularly in the case of self-represented parties in unfair dismissal matters.

[19] A dismissal for cause is not a redundancy. Where there is no change in operational requirements due to restructuring, reorganisation, change to a role, change to the composition of a workforce or a reduction in employees, and a dismissed employee can show that he or she was simply exited from the business and replaced with another person performing the same or substantially the same duties, a dismissal may not meet the definition in s. 389(1)(a).

[20] If an employee whose position is said to be redundant is not covered by a modern award or enterprise agreement, then there are no consultation obligations for the purposes of s. 389(1)(b) of the Act and it is not necessary for the employer to establish that the employee was consulted about the redundancy to establish the genuine redundancy defence to an unfair dismissal application.

[21] In relation to redeployment, s. 389(2) of the Act provides an exception to the circumstances in which a person’s dismissal will be a case of genuine redundancy within the meaning in s. 389(1) of the Act if it would have been reasonable in all the circumstances for the person to be redeployed.11 If s. 389(2)(a) is enlivened, a person’s dismissal will not be a case of genuine redundancy even if the person’s employer no longer requires the job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise and any relevant consultation obligations have been met.

[22] As a Full Bench of the Commission noted in Appeal by Technical and Further Education Commission T/A TAFE NSW12 (Pykett) the circumstances that enliven the exception are that: “it would have been reasonable in all the circumstances for the person to be redeployed within… the employer’s enterprise.”13 The use of the past tense in s. 389(2) directs attention to the circumstances which pertained at the time the person was dismissed. The Full Bench in that case also held that the term “redeployed” should be given its ordinary meaning, including “transfer to another job, task or function.”14

[23] The Full Bench in Pykett also held that it is not necessary that the Commission identify a particular job or position to which the dismissed employee could have been redeployed. 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.15

[24] The job (or position, or work) to which it is said that an employee could have been redeployed, 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. Considerations such as the location of the job and the remuneration attached to it may also be relevant.16 The availability of a more junior role that the employee may have accepted to avoid dismissal on the ground of redundancy could provide a basis for a finding that a redundancy was not genuine or that a dismissal was harsh, unjust or unreasonable.17

[25] In short compass, to enliven s. 389(2) of the Act is not sufficient for the Commission to simply find that an employer failed to consider redeployment of the dismissed employee within its enterprise or the enterprise of an associated entity. It is also necessary for the Commission to be satisfied that there was a job, role, position or work that could have been performed by the dismissed employee and having made that finding to then determine that it would have been reasonable in the circumstances for the dismissed employee to be redeployed. It is not necessary that a specific job role or position is identified for the purpose of determining whether the person could have been redeployed. It is sufficient if there is work that the person could have done.

[26] Consideration of the question of whether redeployment was reasonable involves questions of suitability including the skills and competence of the employee, the training that would be required and factors associated with the job such as remuneration and location. It may also involve an assessment of whether the dismissed employee would have been willing to accept redeployment.

[27] The term “a case of genuine redundancy” has a particular meaning in the context of unfair dismissal provisions of the FW Act, which is essentially that the criteria in s. 389(1) have been met and that it would not have been reasonable in all the circumstances to redeploy the person as provided in s. 389(2).

[28] It is possible that an employer genuinely no longer requires the job of the dismissed employee to be done by anyone because of changes in its operational requirements, but that the Commission will find that the dismissal is not “a case of genuine redundancy” because the employer has not complied with an obligation in a relevant modern award or enterprise agreement to consult the employee or where the Commission finds that it would have been reasonable for the dismissed employee to have been redeployed within the employer’s enterprise or the enterprise of an associated entity. Confusingly, such a case may be a bona fide redundancy, notwithstanding that it does not meet the other requirements in s. 389(1)(b) or s. 389(2) and is therefore not “a case of genuine redundancy” for the purposes of the defence to an unfair dismissal application provided by that section.

[29] The result in such a case is that the employer does not have a complete defence to an unfair dismissal application and the Commission is required to consider whether the dismissal is unfair having regard to the matters s. 387 of the Act which are in the following terms:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[30] Matters in s. 387 relating to the conduct or capacity of the employee will generally not be relevant if the dismissal is because the employer genuinely no longer requires the job of the dismissed employee to be done by anyone resulting from changes in its operational requirements. If the employer seeks to raise conduct and capacity issues relating to the dismissal of an employee that the employer has unsuccessfully argued was a case of genuine redundancy, the requirements in ss. 387(b), (c) and (e) which broadly relate to procedural fairness may not have been met, because the reason for the dismissal at the time it was carried out is redundancy and not conduct or capacity.

[31] Failure to consult a dismissed employee as required by s. 389(1)(b) may not render a dismissal unfair when considered against the matters in s. 387. If the dismissal is a bona fide redundancy because of changes to the employer’s operational requirements and the job not being required to be done by anyone it may be found not to be unfair if consultation would not have negated the operational reasons for the dismissal or led to any other substantive change and the employee would have been dismissed in any event.18 Even if failure to consult in such cases renders a dismissal unfair, the remedy may be limited to compensation for a reasonable period for consultation to have occurred.19 Similar considerations may arise in circumstances where s. 389(2) of the Act is enlivened, however, consideration of whether a dismissal is unfair on the basis of failure to redeploy may involve a fine balance, because of the way the provision is framed and the matters that are required to be assessed.”

Ranchod v Dog and Bone Holdings Pty Ltd T/A Dog & Bone (2021) FWC 6093 delivered 12 October 2021 per Asbury DP