The Fair Work Commission has awarded compensation to a senior researcher whose position was made redundant, after the employer failed to make adequate efforts to redeploy her despite advertising internal vacancies.
Implications for employers
This decision demonstrates the importance of making real and adequate efforts to redeploy an employee whose position is redundant, even where the position available is at a lower level, requiring less skills and experience.
In order to mitigate the legal risk of implementing redundancies where a redeployment obligation applies, employers should give careful consideration to offering redundant employees more junior positions if available.
Dr Ferrao was employed as a Senior Research Officer by the Peter MacCallum Cancer Institute (Peter Mac) from January 2007 until her position was made redundant effective 22 January 2016. Dr Ferrao made an unfair dismissal claim in the Fair Work Commission (Commission), arguing that her dismissal was not a genuine redundancy.
Dr Ferrao worked on specific grant funded research projects. In the three years leading up to the redundancy, Dr Ferrao led the ‘BRAF Project’. Towards the end of the project, it was communicated to Dr Ferrao that her area of research was being de-prioritised, and Peter Mac would not be seeking further funding. It was initially stated that her position would be made redundant on 31 December 2015, but during a meeting in October this was extended to 22 January 2016. Peter Mac committed to making every effort to redeploy Dr Ferrao during the 13 weeks following that meeting.
The person responsible for finding redeployment opportunities for Dr Ferrao gave evidence that they monitored the intranet site for suitable opportunities but none were advertised. No specific redeployment options were identified or discussed with Dr Ferrao. Dr Ferrao did apply for two positions at Peter Mac during the redeployment period but she was deemed unsuitable based on her seniority and research expertise. Dr Ferrao had to compete with other applicants for these roles.
The key issue was whether it would have been reasonable in all the circumstances for Dr Ferrao to be redeployed within Peter Mac.
Section 388(1) of the Fair Work Act (FW Act) states that in order for a redundancy to be a ‘genuine redundancy’ the employer must no longer require the employee’s job to be performed anymore because of changes in the operational requirements of the employer’s enterprise, and the employer must have complied with any obligation in the applicable modern award or enterprise agreement to consult about the redundancy.
Section 388(2) of the FW Act provides that a person’s dismissal will not be 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 the enterprise of an associated entity of the employer.
Section 385 provides that an employee has been unfairly dismissed if the Fair Work Commission is satisfied that the person has been dismissed and the dismissal was harsh, unjust or unreasonable, and the dismissal was not a case of genuine redundancy.
The Commission found that the decision to change priorities for future research areas and funding was a change in the operational requirements of Peter Mac, making Dr Ferrao’s position redundant.
However, the Commission found that the evidence suggested a lack of real efforts to achieve redeployment. Dr Ferrao could have been redeployed to one of the vacant positions for which she applied. Redeployment would have been reasonable in all the circumstances having regard to her length of service and skills, qualifications and experience.
Commissioner Roe accepted that ‘where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job, it will advertise the vacancy, and as such, require the employee to compete with other employees, this might result in a finding that the case is not a genuine redundancy’ on the basis that the employer would have failed to satisfy the requirement to redeploy an employee where it is reasonable to do so pursuant to section 388(2). That is what occurred in this case. Dr Ferrao applied for two jobs which were advertised, but she had to compete with other candidates, notwithstanding Peter Mac’s assertion that it was endeavouring to secure suitable redeployment opportunity for her. Dr Ferrao was unsuccessful in getting the jobs in part because she was too senior.
Based on this conclusion regarding redeployment, the dismissal was a redundancy but not found to be a ‘genuine redundancy’. Dr Ferrao was therefore protected from unfair dismissal. The Commission found that in all the circumstances, the dismissal was unfair because it was unjust to terminate Dr Ferrao where it would have been reasonable to redeploy Dr Ferrao.
Dr Ferrao was awarded 26 weeks’ pay, minus her severance payment of 20 weeks which she had already received, and a further 10% reduction for misconduct (as she had applied for a research grant without authorisation). The total amount of compensation awarded was $9,570.37.
Dr Petranel Ferrao v Peter MacCallum Cancer Institute  FWC 4554