Fair Work Australia has found that dismissals of four employees were not “genuine redundancies”, and therefore did not qualify for the exemption from unfair dismissal laws, because it would have been reasonable for the employer to redeploy the employees into vacant positions in a different division.
Implications for employers
To be able to rely on the “genuine redundancy” exception from unfair dismissal claims, employers should consider all available vacancies within their business before determining that redundant employees cannot be redeployed. This includes vacant positions in different divisions of the business, as well as positions for which the redundant employee might require reasonable re-skilling or training
Four labourers employed by Abigroup Contractors Pty Ltd in its building division were made redundant when the school building projects they had been working on came to completion. Following their dismissal, the employees each made separate unfair dismissal applications to Fair Work Australia (FWA), which were ultimately heard together.
In order to succeed in their claims for unfair dismissal, the employees had to prove that their dismissals were:
- not “genuine redundancies” (in order to overcome the jurisdictional bar to unfair dismissal claims); and
- harsh, unjust or unreasonable.
In order to prove their dismissals were not genuine redundancies, the employees had to show that:
- the employer still required the employee’s jobs to be performed by someone;
- the employer had an obligation under a relevant award or enterprise agreement to consult with employees about the redundancies and had failed to do this; or
- it was reasonable in all the circumstances to re-deploy the employees within the employer’s company, or an associated company, and this had not been done.
The employees argued that their jobs were still needed because, whilst the employer had dismissed them, it had employed 16 other workers to take up positions on the Peninsula Link (PenLink) project.
They also argued the employer was required to consult with them about redundancies and had failed to do so, because the applicable enterprise agreement required the employer to promote voluntary redundancies as a first step and this necessitated consultation with employees.
Finally, the employees argued that they had not been given the opportunity of redeployment despite reasonable vacancies being available. Evidence was led by the employees to show that there had in fact been vacancies in the engineering division on the PenLink project and that the employees had not been offered these roles.
The employees further argued that, if FWA accepted that their redundancies were not genuine, their dismissals were harsh, unjust or unreasonable. This was particularly so given such factors as the employees’ age (most being over 50), economic and personal circumstances, and the fact that one of them was a woman working in a male dominated industry.
In reply, the employer gave evidence that it had had three major projects on the go in the employees’ division and that work on two of them, the Building the Education Revolution (BER) and Partnerships Victoria in Schools (PVIS), had largely come to an end or been shelved. In the employer’s view there was insufficient work to keep the employees on in the building division and there were no appropriate vacancies within the employees’ region that they could be redeployed to. The employer contended that it was not their normal practice to move employees between the building and engineering divisions because of the difference in skill sets and equipment used by each.
The employer acknowledged it had not consulted with the employees about the redundancies but argued that the enterprise agreement did not require it to do so, merely to promote voluntary redundancies. The employer regarded the dismissals as ‘plain vanilla’ redundancies such that no unfair dismissal claim was available.
Work no longer required to be performed by anyone
After assessing all of the material, FWA found that, despite there being recruitments in other areas, the employer no longer required the jobs of the redundant employees to be performed by anyone. The work they were doing came from a spike in projects related to the BER and PVIS stimulus initiatives which had largely come to an end.
Non-compliance with consultation obligations
FWA also found the employer had not breached any consultation obligations. FWA held that, contrary to the position argued by the employees, the provision in the enterprise agreement requiring the employer to encourage voluntary redundancies as a first step did not impose a concurrent obligation to consult with employees about redundancies. This was the case despite consultation being a necessary incidence of offering voluntary redundancies.
Re-deployment was reasonable in all of the circumstances
On the third and final point however, FWA found for the employees. FWA considered all of the evidence and found that it would have been reasonable in all of the circumstances for the employer to redeploy the employees into 4 of the 16 positions it had filled on the PenLink project.
The employees hired on the PenLink project were at the same level as the redundant employees despite some differences in skill sets. Four of the hired employees were required to undertake a 10 week training course to reskill for the project and were under constant supervision whilst they worked. Accordingly, FWA considered that the employees should have been redeployed into the engineering division and been allowed to undertake the 10 week training course if necessary.
Dismissals were harsh, unjust or unreasonable
Because the dismissals were considered not to be genuine redundancies, FWA then considered whether they were harsh, unjust or unreasonable. FWA considered it relevant that the employer had a well-established human resources division which had failed to redeploy the employees as well as the consequences of the age, economic and personal circumstances of each of the employees. Weighing up these factors against the employer’s assertion that it had kept the employees on for as long as they could in the hope of securing further work, FWA found the employees’ dismissals were unfair.
The parties had indicated a willingness during the hearing to hold settlement discussions if FWA found that a remedy should be ordered. On condition that the parties were still happy to proceed on that basis, FWA ordered they be given three weeks to hold those discussions and try to reach an acceptable resolution.
Crema and ors v Abigroup Contractors Pty Ltd  FWA 5322 (26 June 2012)