Worker with 'unique skill set' claims his redundancy was not genuine

The Fair Work Commission (FWC) recently dealt with a case involving a worker who claimed unfair dismissal after being made redundant.

The worker, with over two decades of experience, argued that his redundancy wasn't genuine. He pointed to his unique skill set, his role in improving productivity, and past incidents at work to support his claim.

The case raised questions about what constitutes a genuine redundancy and the procedures employers should follow in such situations.

Worker’s position made redundant

The worker had been employed with a formwork services company since 2010, having previously worked as a subcontractor from 1998. At the time of his dismissal on 3 May 2024, he held the position of Construction Worker Level 6 (CW6), the highest level under the company's enterprise agreement.

The employer was a family-owned business specialising in formwork for construction projects, with offices in Canberra and Newcastle. They provided services for various commercial, multi-storey residential, industrial, and civil projects, including complex formwork for high-rise structures.

On 3 May 2024, the managing director told the worker that his role was being made redundant due to changes in the company's operational requirements. The worker then filed an application with the Fair Work Commission, saying he was unfairly dismissed.

Employer’s operational changes and new requirements

The worker said his redundancy was not genuine. He pointed out his extensive experience and unique skill set, arguing that he was key in bringing back traditional formwork techniques that improved productivity and quality. The worker stated:

"Unlike many formwork carpenters with less training, [the worker] was an all-rounder who could be given any job, with a guarantee that [the worker] would provide a professional standard of work."

He also mentioned previous incidents, including a workplace injury in 2020 and what he saw as unfair treatment after his brother's legal action against the company in 2017.

The employer said the redundancy was genuine, citing financial pressures and a significant downturn in business. They showed evidence of a 31.3% decrease in square metres laid compared to the previous year, which is an important measure for their industry.

The chief financial officer explained:

"As labour was the biggest cost to the business, [the employer] discussed the cost of [the employer's] construction workers. [The employer] approached the redundancies from the highest classification workers, that being CW6, as that level was not required on any of the projects [the employer] had."

The managing director said the decision was based only on operational requirements and not influenced by any previous workers' compensation claims or other factors.

Is it a genuine redundancy?

The FWC looked at three main points to decide if the dismissal was a case of genuine redundancy:

1. Whether the employer no longer needed the job to be done by anyone due to changes in operational requirements.
2. Whether the employer had followed any consultation requirements under the relevant enterprise agreement.
3. Whether it would have been reasonable to move the worker to another position within the company.

The Commission accepted the employer's evidence about the business downturn and the need to reduce labour costs. It found that the decision to make the CW6 role redundant was driven by operational requirements.

Regarding consultation, the FWC decided that the redundancy did not count as a "major change" under the enterprise agreement, and therefore did not require consultation. The Commission stated:

"[The Commission] is not satisfied that the decision to make the CW6 position held by [the worker] redundant to be a major change. The business operations have not changed in any significant way, in that it continues to provide formwork services in the construction industry."

On the question of redeployment, the FWC was satisfied that the employer did not have any other suitable positions available.

Based on these points, the FWC concluded that the worker's dismissal was a case of genuine redundancy under s.389 of the Fair Work Act. The Commission noted:

"[The worker] is clearly a highly skilled formwork carpenter and an all-rounder who consistently produced a high standard of work, and so it is difficult to see why [the employer] would want to let someone with [the worker's] qualifications and expertise go, but that is not the test [the Commission] is required to apply."

The FWC further stated:

"For the above reasons, [the Commission] is satisfied that [the worker's] employment came to an end for reason of a genuine redundancy within the meaning of s.389 of the Act."

This case shows the importance of employers documenting their decision-making process and being able to show genuine operational reasons for redundancies. It also highlights the need to understand when consultation is required under relevant awards or enterprise agreements.