What is “consultation” in redundancy law?

The jurisdictional defence to an unfair dismissal case of genuine redundancy requires several elements to be established as having been met by the employer seeking to rely upon it including that the employer complied with the consultation obligations of an applicable modern award or enterprise agreement. It is surprising how infrequently this issue is litigated in an unfair dismissal cases but here is one and the extract dealing with the particular issue is set out here.

“[17] The meaning of the term ‘consultation’ was considered in detail by a Full Bench of the

Commission in CFMMEU v Mt Arthur Coal5

. Whilst that decision was primarily related to

consultation regarding the development of a COVID-19 policy, the observation at paragraph

[108] applies equally in this matter:

“[108] The following propositions may be drawn from these cases about what

constitutes consultation:

  • the content of any specific requirement to consult is necessarily dictated by the precise

terms in which such a requirement is expressed; the nature of the factual or legal

issues the subject of the requirement; and the factual context in which the requirement

is exercised, including the particular circumstances of the persons with whom there

must be consultation

  • a responsibility to consult carries a responsibility to give those consulted an

opportunity to be heard and to express their views so that they may be taken into

account

  • the consultation needs to be real; it must not be a merely formal or perfunctory

exercise

  • even though management retained the right to make the final decision, it is not to be

assumed that the required consultation was to be a formality. Management has no

monopoly of knowledge and understanding of how a business operates, or of the

wisdom to make the right decisions about it. The process of consultation is designed

to assist management, by giving it access to ideas from employees, as well as to assist

employees to point out aspects of a proposal that will produce negative consequences

and suggest ways to eliminate or alleviate those consequences

  • the party to be consulted [must] be given notice of the subject upon which that party’s

views are being sought before any final decision is made or course of action embarked

upon

  • while the word ‘consultation’ always carries with it a consequential requirement for

the affording of a meaningful opportunity to the party being consulted to present those

views, what will constitute such an opportunity will vary according [to] the nature

and circumstances of the case. In other words, what will amount to ‘consultation’ has

about it an inherent flexibility

  • a right to be consulted, though a valuable right, is not a right of veto
  • the consultation obligation is not concerned with a likelihood of success of the process,

only to ensure that it occurs before a decision is made to implement a proposal

  • an ordinary understanding of the word “consult” would suggest that the obligation to

consult does not carry with it any obligation either to seek or to reach agreement on

[2023] FWC 658

6

the subject for consultation. Consultation is not an exercise in collaborative decisionmaking. All that is necessary is that a genuine opportunity to be heard about the

nominated subjects be extended to those required to be consulted before any final

decision is made

  • the requirement to consult affected workers would … not be satisfied by providing the

employees with a mere opportunity to be heard; the requirement involves both

extending to affected workers an opportunity to be heard and an entitlement to have

their views taken into account when a decision is made

  • genuine consultation would generally take place where a process of decision-making

is still at a formative stage

  • the opportunity to consult must be a real opportunity not simply an after thought
  • consultations can be of very real value in enabling points of view to be put forward

which can be met by modifications of a scheme and sometimes even by its withdrawal.

  • there is a difference between saying to someone who may be affected by a proposed

decision or course of action, even, perhaps, with detailed elaboration, ‘this is what is

going to be done’ and saying to that person ‘I’m thinking of doing this; what have you

got to say about that?’. Only in the latter case is there ‘consultation’

  • it is implicit in the obligation to consult that a genuine opportunity be provided for the

affected party to attempt to persuade the decision-maker to adopt a different course

of action. If a change has already been implemented or if the employer has already

made a definite or irrevocable decision to implement a change then subsequent

‘consultation’ is robbed of this essential characteristic

  • any offer to consult in relation to the matter was in the context that the respondent had

already made an irrevocable decision, then the party had not, to use his Honour’s

words, consulted about the decision in any meaningful way.”

[18] Ms Khliustova’s evidence differed slightly from Mr Steers. The Applicant contended

that she was told that there might be redundancies, and that if that were the case, her position

would be one of them, a day prior to Mr Steers’ meeting.

[19] The conversation detailed by Mr Steer does not constitute ‘consultation’. Ms Khliustova

was not given an opportunity to be heard and to express her views such that they might be taken

into account in Isoton’s decision making process. Isoton’s consultation was at best a perfunctory

exercise. The decision had been made prior to the discussion of 9 December 2022

[20] The information provided in the letter dated 10 December 2022 did not remedy the

defect and, in my view, fails to meet the requirements of Clause 24.2 of the Award.”

 

Khliustova v Isoton Pty Ltd [2023] FWC 658 delivered 28 April 2023 per Platt C