In a dynamic and fast paced business environment, structuring the workforce to meet changing operational requirements is front of mind for most employers.

These requirements will often necessitate changes to an employee’s duties to ensure the business has the right skills in place in a competitive market – for example, to keep pace with technological change. Employers may also look to fill a resourcing gap by utilising existing employees in a different role, rather than recruiting.

The ability to direct an employee to perform additional or different duties will depend on the specific employment instruments that are in place, and their terms. The starting point is to consider the contract of employment, job description and any applicable industrial instrument to confirm what the job involves, whether a variation is permitted, and in what circumstances.

In some cases, organisational change may give rise to a redundancy, entitling the employee to severance pay. A redundancy situation may occur where the duties performed by an employee change so substantially that there is no longer any function or duty attached to the position. But where is the line? The Federal Court of Australia recently considered this question on appeal, from the Federal Circuit Court.

Sensis Pty Ltd v Robert Gundi

Seyfarth Shaw acted for the successful appellant, Sensis (Sensis Pty Ltd v Robert Gundi [2017] FCA 1519), in this case. A Sensis sales employee was directed to focus his sales activities on winning new business from prospective customers, rather than selling to customers that already had a relationship with the company. This was the only change to the role. The job description required the employee to sell advertising products and services to both existing and prospective customers of Sensis.

Mr Gundi asserted he had been made redundant, however the Court found that the employee’s position was not redundant, because at all times, he was required to service new and existing customers of Sensis. While the split between new and existing business had changed (quite a lot), the basic duties he was directed to perform were within the scope of the position, as contemplated by the contract of employment and job description.

The upshot is that employers will have some flexibility to change an employee’s duties at their prerogative, provided it is within the scope of the employment, and specifically, the employee’s contract. Think about giving the business this kind of ‘flex’ when drafting contracts.