Was the employer avoiding payment of his redundancy package?
The Federal Circuit and Family Court of Australia (FCFCOA) recently dealt with a manager's claim that he was being forced to accept a redeployment role because his employer allegedly refused to pay his redundancy severance package.
The manager also claimed that his employer exerted "undue influence and pressure" over him to accept the role, and when he didn’t, he was fired.
The employer disputed these claims and argued that it terminated the manager's employment because he refused to accept its offer despite his initial role not being redundant.
Company undergoes ‘business restructure’ due to the COVID-19 pandemic
The employer, an adventure travel company based in Melbourne, underwent restructuring before the COVID-19 pandemic. The manager, employed in the Peak Destination Management Company (PEAK DMC) division, had previously taken extended annual leave due to stress and burnout.
In January 2020, the manager was appointed to the role of Managing Director - Hotels for 50% of their time while continuing their duties as Global General Manager – PEAK DMC for the remaining 50%.
After a month, the employer offered him the role of Managing Director – North America (MD Offer), which required him to relocate. He accepted the MD Offer on 24 February 2020.
Due to the onset of COVID-19 and the closure of international borders, he was unable to relocate as planned in accordance with the MD Offer.
Manager’s hesitation to accept the redeployment role
Later, after a series of communications with the employer, he then revoked his acceptance of the new role due to the pandemic and personal reasons.
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Afterward, the employer proposed a new role, but the manager hesitated over concerns about its suitability. He also inquired about redundancy, which the employer declined.
The manager went on sick leave for several periods during these discussions. Ultimately, the employer appointed him to the redeployment role under a JobKeeper provision, but he continued to reject this role and insisted that his initial role was redundant.
After further exchanges, the employer emailed the manager requesting his decision to either accept the redeployment role or consider resignation. The manager replied by proposing that his resignation be announced as a redundancy, which the employer rejected. Consequently, the employer terminated his employment.
Employer ‘actively and genuinely engaged’ with the manager
In its decision, the court noted that the manager “refused to accept, and carry out the duties of, the redeployment role.”
“[He] had been appointed to the role under the JobKeeper Direction, and there is no evidence that [he] complied with that direction. The [employer] negotiated with [him] for a period of two months in an attempt to come to a compromise about [his] role and retain [him],” the court said.
“[The employer’s] senior employees were aware that [he] did not want to accept the redeployment offer and had expressed concerns and asked questions about his role. The [employer] actively and genuinely engaged with the [manager] regarding his complaints and inquiries about the redeployment role, redundancy and the changing work environment,” it added.
“[The company] provided details and information when relevant and/or requested and had numerous conversations with the [manager] to inform him and assist him in making his decision about performing the redeployment role,” it said.
As to the manager’s allegations that the employer exerted “undue influence and pressure” to accept the new position to “forgo his redundancy pay,” the court said he had “no evidence” to support these claims.
Was the manager’s role redundant?
“The substance of the job is providing financial direction and expertise to the [company], and alongside the Global Leadership Team, provide strategy to and be responsible for the [employer’s] commercial activities, operational practices, policies and procedures, and a specific division within the company,” the court said.
“Whilst the position of the role within the [employer’s] structure and the nuances of the role changed, the role continued to be that of a senior financial manager responsible for a division of the [employer’s] day-to-day business, commercial activities and strategy,” it added.
Consequently, after comparing the manager’s initial position and his redeployment role, it ultimately ruled that “the role of the [manager] was not redundant and therefore the [manager] is not entitled to redundancy pay.”
Thus, it said the manager “was not dismissed for any reason that [violated] the Fair Work Act,” nor was he subjected to undue influence or undue pressure from the employer. It then ordered the manager’s application to be dismissed.