Australia: Consultation with employees - Why, what and when?

The obligation on employers to consult with employees arises in a number of contexts. It is an obligation that often doesn't get the focus that it requires.

However, the decision in Australian Licenced Aircraft Engineers Association v Qantas Airways Limited (No.2) [2013] FCCA 1696 (28 October 2013) reminds employers that consultation is not something that they can approach as a mere formality in the decision making process. A failure to consult can result in substantial civil penalties being imposed. In that case, Judge Raphael of the Federal Circuit Court of Australia ordered Qantas to pay $41,250 in penalties for breaching its consultation obligations and for failing to provide information required for effective consultation.

In this In Brief, we examine when employers are required to consult with their employees, what consultation means and the costs of non-compliance.


Under the Fair Work Act 2009 (Cth) (FW Act), the obligation to consult arises in the following main situations:

  1. when considering making a major workplace change that will have a significant effect on employees covered by a modern award or an enterprise agreement;
  2. in connection with termination of employment; and
  3. when implementing changes that affect employees on unpaid parental leave.

Consultation obligations also arise under workplace health and safety legislation (although these requirements are not covered in this In Brief).

Major workplace change

All enterprise agreements and modern awards must include consultation terms that require employers to consult employees about major workplace changes that are likely to have a significant effect on their employment. The parties to an enterprise agreement can agree to their own consultation term; otherwise, the model consultation term in the Fair Work Regulations 2009 (Cth)1 will be taken to be included in the enterprise agreement. The model consultation term is in similar terms to that contained in modern awards.

Consultation under an award or agreement usually requires an employer to notify its employees of a decision to introduce any major workplace change as soon as practicable after the decision is made; and to discuss the changes with employees and their representatives. The discussion should cover the introduction of the change, the effect the change is likely to have on employees and the measures being taken to mitigate any adverse effect of the change on employees. There is also an obligation to provide information to employees about the proposed change in writing, and to give "prompt and genuine consideration to matters raised" by employees or their representatives.

For these purposes, major workplace change includes:

  1. undertaking a restructure;
  2. making positions redundant;
  3. making changes to rosters;
  4. making changes to working hours;
  5. transferring employees to other work or other work locations; and
  6. requiring employees to undertake retraining.

There may be additional obligations for an employer depending on the specific terms of any consultation term the parties have included in an enterprise agreement (if they have not adopted the model term).

A failure to comply with the obligation to consult in either an award or enterprise agreement can expose an employer to penalties.

Termination of employment

There are a number of provisions in the FW Act which require employers to consult with an employee prior to terminating their employment:

(a) Where an employer has decided to make 15 or more employees redundant, section 531 requires that the employer must notify any relevant union/unions and consult with those unions on the following issues:

  1. measures to avert or minimise the proposed dismissals; and
  2. measures (such as finding alternative employment) to mitigate the adverse effects of the proposed dismissals.

This opportunity to consult must be given as soon as practicable after the employer's decision to implement the redundancies, and prior to any dismissals taking effect.

(b) Employers are required to comply with the consultation obligations imposed by an applicable modern award or enterprise agreement, in order to rely upon the exemption from unfair dismissal claims in the case of a "genuine redundancy" (under section 389 of the FW Act).

Employees on unpaid parental leave

Section 83 of the FW Act imposes obligations on employers to consult with employees on unpaid parental leave, in relation to any changes that will have a significant effect on the status, pay or location of the position held by the employee prior to taking that leave.


There is no hard and fast rule as to what it means to consult for the purposes of the legislative obligations discussed above. Consultation requirements can vary according to the particular circumstances, and the wording of applicable award or agreement provisions.

What is clear is that the consultation must be genuine. An employer may be penalised if it is apparent that the employer treated consultation as a mere formality in the overall decision making process, and had made a final decision before consulting employees or did not intend to take on board any of the employees' feedback.

If the consultation process is challenged, internal documents created by the employer can be reviewed to determine the genuineness of the consultation.

Generally speaking, consultation requires an employer to discuss the introduction of changes that will affect the workforce or the particular employee, and to consider the views of employees before making a final decision. This does not mean employers have to give employees and their representatives a right of veto or ask for their consent to the proposed change.

To discharge the obligation to engage in "genuine consultation" an employer should:

  1. engage in consultation early on;
  2. provide employees and their representatives with a real opportunity to provide their views and opinions on the proposed decision;
  3. remain open to suggestions;
  4. provide comprehensive information to employees about the proposed decision and make sure it is in an accessible format;
  5. respond to any requests for information from employees – although this does not mean the employer is required to provide confidential or commercially sensitive information;
  6. keep records of conversations involving consultation;
  7. review any suggestions or opinions made by employees or their representatives;
  8. if deciding to implement the original decision which was the subject of consultation, explain the rationale for this to employees and their representatives; and
  9. consider seeking legal advice if unsure of the extent of the employer's obligations.


Employers need to properly consider their consultation obligations, because a failure to meet these obligations can result in a range of potential adverse consequences including:

  1. substantial legal costs;
  2. a greater exposure to successful unfair dismissal claims where employees have been made redundant, because the "genuine redundancy" defence will not be available; and
  3. proceedings for breach of an applicable award/enterprise agreement, and the imposition of substantial civil penalties as highlighted by the recent Qantas decision.


Qantas decision

In Australian Licenced Aircraft Engineers Association v Qantas Airways Limited (No.2) [2013] FCCA 1696, Qantas was ordered to pay a total of $41,250 in penalties for breaching its consultation obligations and for failing to provide information that was required for consultation.

The case arose from Qantas' announcement that it was changing its maintenance procedures by introducing a Maintenance on Demand (MoD) system for its Boeing 737-800 and Airbus A330 fleet. The introduction of MoD resulted in fewer checks being performed on these aircraft by licenced aircraft maintenance engineers (LAMEs), and led to the positions of 30 LAMEs being made redundant.

In the substantive proceedings,2 the Court had found that:

  1. Qantas breached its consultation obligations under the applicable workplace determination, by not genuinely consulting with the Australian Licenced Aircraft Engineers Association (ALAEA) in relation to its decision to make the 30 LAMEs redundant. The Court found that Qantas made a definite decision to make the positions of 30 LAMEs redundant prior to consultation occurring. This was evident from a letter Qantas sent to the ALAEA prior to consultation occurring, informing the union of its decision to introduce t MoD and stating "as a result of this decision, approximately 30 positions will become redundant." Qantas used the consultation process to determine who would volunteer to leave employment and to inform the employees of their rights and opportunities in this respect. However, the Court considered that the redundancies were a "foregone conclusion", regardless of any consultation process, so there was no opportunity for the union to negotiate over the number of redundancies.
  2. Qantas also breached its obligation under the workplace determination to provide certain information which had been requested by the ALAEA as part of the consultation process.

These breaches constituted contraventions of section 280 of the FW Act, with each contravention attracting a maximum penalty (at the time the breaches occurred) of $33,000 for a corporation.

In the penalty decision, the Court imposed upon Qantas penalties of:

  1. $24,750 for failing to genuinely consult; and
  2. $16,500 for failing to provide information required for consultation.

According to the Court, the relatively high penalty for failing to consult was justified for a number of reasons, including the need for deterrence and the fact that the breach involved senior management and a "deliberate action by a large corporation".

Finally, employers should note that the maximum penalties for breaches of this kind have recently been increased to $10,200 for individuals and $55,000 for corporations – a further reason to ensure compliance with statutory, award and agreement consultation requirements.


1Schedule 2.3, see here.

2Australian Licenced Aircraft Engineers Association v Qantas Airways Limited [2013] FCCA 5992.

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.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.