The Federal Court recently fined the Royal Melbourne Institute of Technology (RMIT) $37,000 and ordered it to reinstate an academic for using a sham redundancy to "get rid of an undesired employee".

The university claimed it had made the academic redundant for financial reasons, as her area was running at a loss, however Justice Peter Gray found RMIT took unlawful adverse action when it dismissed the academic after she had fallen out with her head of school.

NEED FOR DETERRENCE

In setting the penalties, Justice Gray noted that RMIT, particularly the Vice-Chancellor, had displayed no contrition. He commented that, "unless the effect of a penalty is felt, RMIT might again succumb to the temptation to make use of its redundancy processes to rid itself of an employee".

He added, "Employers must understand that making use of redundancy as a pretext for getting rid of an undesired employee is not an option."

In finding RMIT breached s 340(1)(a)(ii) of the Fair Work Act, Justice Gray held the university had failed to prove that the reasons for the academic's dismissal did not include those alleged by the NTEU - that she had exercised, or planned to exercise, workplace rights, including making bullying and intimidation complaints against her new head of school to various people within RMIT and to WorkSafe Victoria.

He said his finding was also based on the absence of "any clear expression of a connection between the financial deficit in the Youth Work discipline and the choice of [the academic] as the one who should be made redundant".

"This includes the absence of the expression, or the application, of any criteria by reference to which the making of that choice occurred."

Justice Gray said that the Vice-Chancellor failed to give explicit evidence that none of the reasons the NTEU alleged were behind the sacking "was operative in her decision", and had in fact indicated that she had "reasons other than those to which she referred explicitly".

Further, he said he was influenced by the Vice-Chancellor's determination to "ignore her knowledge" of [the new head of school's] animosity towards the academic.

DOUBLE PENALTY ORDERED

Justice Gray found that RMIT had breached its enterprise agreement with the NTEU by failing to provide the academic with the option of participating in a voluntary redeployment process.

He penalised RMIT $27,000 for contravening the Fair Work Act and $17,000 for breaching its enterprise agreement. However Justice Gray reduced the total fine from $44,000 to $37,000 because there was some overlap between the two.

He ordered RMIT to pay the penalty to the NTEU, saying "the scheme under which the enforcing party is the recipient of the penalty is designed to encourage the enforcement of provisions of the Fair Work Act and of agreements and other instruments made under it".

Justice Gray ordered the academic to be reinstated to the position she held immediately before her dismissal took effect, which would see her working in a separate building to the head of school and not directly reporting to him.

WHAT DOES IT MEAN FOR EMPLOYERS?

This case raises serious questions about an employer's responsibility to ensure an employee's dismissal is a 'genuine redundancy', particularly in instances where the individual selected for redundancy can demonstrate that other factors (such as complaints made by the individual) might be motivating the redundancy decision.

If you are considering terminating an employee, please contact us to discuss how ClarkeKann can provide advice and assistance in meeting your employment obligations.

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