Employer argues genuine redundancy, cites change in operational requirements
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application filed by a worker against her former employer, an employee holding entity within a group of related entities known as 'Eternus'.
The worker, who was employed as an accountant, claimed that she was dismissed without any consultation or proper assessment of her work performance. In response, the employer raised a jurisdictional objection, arguing that the dismissal was a case of genuine redundancy.
The decision provides valuable insights into the interpretation and application of the relevant provisions of the Fair Work Act 2009 (Cth) and sheds light on the factors that can influence the outcome of an unfair dismissal claim, particularly in the context of a business restructure and changing operational requirements.
Accountant’s alleged unfair dismissal
The worker filed an unfair dismissal application with the FWC, stating that she was dismissed by her employer on 6 February 2024 without prior notice or proper assessment of her work performance. She had been employed by the employer since 4 December 2023 and had previously worked for a related entity since 14 November 2022.
In response, the employer raised a jurisdictional objection, asserting that the worker's dismissal was a case of genuine redundancy due to a business restructure that resulted in her position no longer being required.
The employer submitted that between September 2023 and January 2024, the organisation went through a restructure that led to the downsizing and merging of business operations for commercial reasons.
Legal framework for genuine redundancy
The FWC said it must consider several factors before determining the merits of an unfair dismissal application. One of the key issues is whether the dismissal was a case of genuine redundancy. Section 389 of the Fair Work Act 2009 (Cth) defines genuine redundancy as follows:
"(1) A person's dismissal was a case of genuine redundancy if:
(a) the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy."
Business restructure and operational requirements
The employer submitted that as part of the restructure, assessments were made by the executive team of the future operational requirements of the operating entities, resulting in a significant reduction in business streams and a change in strategy and industry focus.
The employer argued that the organisation's operations were significantly scaled back, leading to the determination that nine roles, including the worker's position, were no longer required.
The employer maintained that the worker's job no longer existed, as the duties she performed were either redistributed or no longer required to be performed at all.
The employer emphasised that the fact that some of the duties were still required to be performed was irrelevant, as far fewer roles of this level were needed overall.
Consultation and redeployment considerations
The employer submitted that it had consulted with its employees about the restructure through various methods, including meetings, emails, newsletters, and video posts on the company intranet.
The consultation process aimed to provide information about the introduction of the restructure, its likely effects, measures taken to mitigate adverse impacts on employees, and the revised business strategy.
However, the worker questioned the timing and effectiveness of the consultation process, arguing that her work calendar had been fully booked for the entire year ahead, as directed by her supervisor in January 2024.
She submitted that this contradicted the employer's claim of a genuine redundancy, as it suggested that her role was still required.
Regarding redeployment, the employer maintained that despite its best efforts, the worker could not reasonably be redeployed within the business or an associated entity.
The employer stated that a thorough assessment was conducted by the People & Culture Team to identify other suitable work available for the worker within the organisation. The employer also noted that the worker was provided with the opportunity to apply for a more senior role within the organisation but did not do so.
Worker's submissions and evidence
The worker presented several arguments to support her position that the dismissal was not a case of genuine redundancy.
She pointed out that a job advertisement for her role was posted on Seek the day after her dismissal, and her work calendar was fully booked for the entire year ahead.
The worker also argued that there was no restructure, but merely growth and shaping of the business, which was the reason she was employed in the first place.
Furthermore, the worker submitted that no redeployment options were offered, despite opportunities within the group, and no consultations took place with her supervisor or manager.
She relied on various communications and job advertisements to support her arguments, including an email from the Founder of Eternus discussing the "Eternus Effect" and the collective effort of the team in contributing to the organisation's success.
The worker said her extensive professional background and qualifications, stating that she had dedicated all her efforts to contributing to the employer's business and performed with high standards and ethics. She argued that her dismissal was harsh and abrupt, without any reason or consultation, following a conflict raised with her supervisor.
Employer's response
In response to the worker's assertions, the employer maintained its position that the termination of her employment was a genuine redundancy.
The employer addressed the worker's main arguments, including the continuing role assertion, the same role assertion, and the redeployment assertion.
The employer submitted that the worker's role was no longer required to be performed, and the new senior management accountant role advertised on Seek was not the same as the redundant role.
The employer also maintained that redeployment options were considered but not feasible.
Unfair dismissal or genuine redundancy?
The FWC's decision in this case highlights the complexities involved in determining whether a dismissal is a genuine redundancy. The ruling notes the importance of considering the specific circumstances of each case and the evidence presented by both parties.
As the FWC noted in its decision:
"Consideration as to whether the dismissal was harsh, unjust or unreasonable cannot occur if the dismissal was a case of genuine redundancy. If the Commission determines that the dismissal was a case of genuine redundancy, the application will be dismissed."
The decision also underscores the significance of proper consultation and redeployment considerations in redundancy situations. Employers must ensure that they comply with their obligations under modern awards or enterprise agreements when implementing redundancies.
"The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy."
Furthermore, the FWC highlighted the importance of exploring redeployment options before proceeding with a redundancy:
"A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer's enterprise; or
(b) the enterprise of an associated entity of the employer."
‘Does not possess the qualification’
“The [employer] made a decision to restructure its business in a dramatic fashion in an attempt to survive. More than 70 employees have been made redundant to achieve this ambition. In doing so, the [employer] decided to uplift its accountancy function from a Management Accountant to a Senior Management Accountant (SMA),” the FWC said.
“The [employer] required the SMA to hold a CPA. Although eminently qualified, the [worker] does not possess this qualification. Whilst I am confident that the [worker's] qualifications may have provided her with some exemptions towards her CPA qualification, neither party provided that information in the hearing. Therefore, it is not possible to evaluate the quantum of study required by the worker to achieve her CPA,” it added.
“Further, the [employer] has now withdrawn the SMA role from the organisational chart and the accountancy duties have been assumed into the role of Head of Finance. The [worker] is quite clearly a well-educated and competent accountant. Her performance with the [employer] was undertaken without criticism or negative performance appraisal. However, the [employer] had an absolute need to restructure in order to survive. Unfortunately, the [worker] was a casualty of this restructure,” the FWC said.
Thus, the FWC said it was satisfied that the worker’s dismissal was a genuine redundancy. It then rejected the worker’s unfair dismissal application.
