The Federal Circuit Court (Court) has handed down $41,250 of penalties to an employer for breaching its obligation to genuinely consult on business changes that resulted in redundancies.
The breaches arose from the employer’s implementation of a new system of work that resulted in 30 positions being made redundant. The employer held discussions with affected workers, but those discussions did not satisfy the employer’s consultation obligations under the terms of the relevant industrial instrument, because it was found that the redundancies were a foregone conclusion by the time that the relevant ‘consultation’ occurred.
The Court held that the employer was entitled to introduce changes to its system of work, but that it was required to properly consult with employees on the possible effects of its decision before implementing relevant changes.
In this case, the employer’s discussions with workers were simply held too late, as the system of work decision had been made and the relevant consultation process focused simply on the redundancies caused by the decision to change the system of work.
Lessons for employers
This case serves as a reminder to employers that they must be sure to fulfil their consultation obligations by consulting early and in a meaningful way. It is not enough for employers to simply pay lip service to their consultation obligations by engaging in purported but meaningless consultation once a decision has already been made. An employer that does so will not meet its obligations and it will be exposed to penalties.