When the employer underwent a restructure, the employee’s reporting line changed, as well as his membership of a particular leadership team. His role was not abolished. For two months after the restructure, the employee continued to work in the same role, under the same contract, until he tendered his written resignation. He subsequently filed a dispute under the terms of the applicable Enterprise Agreement, seeking orders that he should have been retrenched by the employer.

He also argued that the consultation process relating to the restructure was inadequate and that such inadequacies constituted a breach of the Enterprise Agreement. The employer argued that, notwithstanding that the employee’s position was modified as a result of the company restructure, the role continued to exist and at no time did the employer contemplate its abolition.

Deputy President Sams held that the employee was at no point redundant. He agreed with the employer’s arguments, noting that the employee’s post-restructure role was predominantly the same as the role he had performed prior to the restructure. That is, more than a ‘major part’ of the role remained, with a ‘major part’ being more than 50% of the role. 

He added that the test for whether a proposed role is ‘comparable’ was an objective one, with reference to factors such as the level of responsibility, the number of direct reports, the skills and expertise required and the remuneration. Subjective factors such as whether the employee likes the role or feels a loss of importance do not need to be taken into account. 

Finally, Deputy President Sams rejected the employee’s argument about the consultation process, as it was apparent on the facts that the employee had made up his mind and had no intention of changing it.

Key points for employers:

  • Where a redundancy clause is expressed as ‘the role, or a major part of the role, no longer being required to be done’, then ‘major’ must mean more than half.
  • The test of whether a proposed role is ‘comparable’ is an objective one.
  • Where it is apparent that the length of the consultation period would not have altered an employee’s actions or decisions, the reasonableness of the period must be seen in that context.

A link to the decision can be found here: Paul Heath v National Australia Bank Ltd [2014] FWC 3944