Failure to consult makes redundancy not genuine

The Fair Work Commission ruled that an employer's failure to consult and consider ways to avoid retrenchment rendered the redundancy non-genuine.

The meaning of “genuine redundancy” is defined in Section 389 of the Fair Work Act as follows: 

(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. (emphasis added)

MySharedServices Pty Ltd dismissed a consultant little more than a week after the Morrison Government revealed the details of its JobKeeper wage subsidy program.

The Commission accepted that the Company no longer required the role performed by the consultant to be performed by anyone because of changes in its operational requirements and it therefore met the requirements of the Fair Work Act's s389(1)(a). However, the Commissioner found the Company did not comply with its obligation under the relevant Award to consult with the employee, and this meant the redundancy could not be found to be genuine.

The Commissioner said that:

• MySharedServices failed "to engage in any discussion" with the employee and the other two workers it dismissed at the same time and "there may well have been opportunities for [the employee] to be redeployed".
• It "cannot be known what might have come out of a proper consultation process with all of the staff affected by the change".
• "It cannot be known what proposals [the consultant] (or others for that matter) may have put forward as a means of securing his employment.”
• "He may, for example, have offered to take leave with or without pay until the situation was better understood, or until it was known how JobKeeper, …, would operate …”
  

The Commissioner accepted that the dismissal as such was not a “genuine redundancy” and said she would order compensation after the parties provide further submissions.

This should serve as a warning to all employers to pay attention to the process when dealing with redundancies.

Matthew Browne v MySharedServces Pty Ltd [2020] Fair Work Commission 4445

Disclaimer: This summary is a guide only and is not legal advice. For more information on redundancy, call NECA Legal (WA) Pty Ltd on 6241 6129 or email necalegalwa@ecawa.org.au