Key Points: The redeployment obligation requires an employer to
actually transfer the employee rather than simply assist the
employee to find an alternative position.
An employer must actively attempt to redeploy an employee in an
associated entity before the redundancy is considered
"genuine" under the Fair Work Act 2009 (Cth) - but what
exactly does this entail? A recent case offers some guidance
(Howarth v Ulan Coal Mines Limited  FWA 4817).
The employer and the redundancy
Ulan Coal Mines Limited, and a number of other companies,
operated coal mines as subsidiaries under Xstrata Coal Pty Ltd. It
was not in dispute that these companies were associated
After conducting a review of operations, Ulan Coal made a number
of employees redundant. The CFMEU lodged applications on behalf of
ten of the dismissed employees, alleging the employees had been
unfairly dismissed. The CFMEU claimed the redundancies were not
"genuine redundancies" and therefore the employees were
able to access an unfair dismissal remedy.
Was there a "genuine redundancy"?
At first instance, Fair Work Australia (FWA)
held that the dismissals were not genuine redundancies as Ulan Coal
still required the jobs to be performed and had not met all the
appropriate consultation requirements. Ulan Coal appealed the
decision to the Full Bench of the FWA, which did find the
redundancies to be genuine.
The Full Bench noted that the restructure had involved an
overall reduction in the size of the non-trade workforce and
distinctions were also made between the jobs of mineworkers
retrenched and the functions performed by those mineworkers.
The case was remitted to the Commissioner at first instance, to
determine whether the redeployment requirements of section 389(2)
of the Fair Work Act were satisfied.
Was there an active attempt to redeploy an employee in
an associated entity?
FWA found that redeployment of the employees at Ulan Coal mine
site was not reasonable. However, FWA also found that Ulan Coal
should have redeployed six out of the ten employees to associated
entities within the Xstrata group. It was held not to have been
reasonable to redeploy the other four workers because of, amongst
injury, resulting in one worker being placed on lighter duties
and without a clear prognosis; and
a reluctance of the other workers to travel to the other
companies (the closest vacancy was approximately 100km away).
What must an employer do to discharge its redeployment
FWA held that redeployment requires a transfer of the employee
within the employer's enterprise or an associated entity.
Merely assisting the employee to find alternative employment or the
employee independently finding employment is insufficient to
discharge an employer's redeployment obligations.
While Ulan Coal had made vacancies known to employees and
facilitated its associated entities offering employment after a
selection process, Commissioner Raffaelli held that this was
tantamount to assisting the workers gain employment rather than
redeploying them. In this, FWA chose to give a narrow reading to
the work "redeploy" and disregarded Ulan Coal's
argument that it was not in a position to dictate to other Xstrata
companies who they should employ.
Further, Commissioner Raffaelli found there to be no requirement
that an employee be transferred to a particular position/job, only
that they be redeployed within "the enterprise", where
What does this mean for employers?
An employer may be liable for an unfair dismissal claim
resulting from a redundancy, if it does not ensure that it has
fully discharged their redeployment obligations. If it is
reasonable in all the circumstances to redeploy the person, the
person must be transferred to an alternative position within the
entity or an associated entity and not merely assisted in finding
an alternative position. This places a substantial obligation on
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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