Australia: When is an employer obliged to create vacancies for redundant employees?

Last Updated: 16 February 2017
Article by Charles Power

A dismissal in the case of genuine redundancy is exempt from unfair dismissal laws under the Fair Work Act 2009 (Cth) (FW Act). However, if it would have been reasonable in all circumstances for the employee affected by redundancy to be redeployed, the exemption from FW Act unfair dismissal laws do not apply.

Redeployment refers to the employer offering an employee in a redundant position, the opportunity to continue his or her employment in another role. That alternative role need not be in the same business or with the same employer. It can be in another business carried on by the employer, or even with a different employing entity that is controlled by the original employer.

When will it be reasonable to redeploy an employee affected by redundancy? Based on the decision of the Fair Work Australia Full Bench in Ulan Coal Mines Ltd v Honeysett and Ors [2010] FWAFB 7578, the following are relevant considerations:

  • Whether there are vacancies for jobs which are potentially suitable for the dismissed employee, having regard to the skills, qualifications and experience required for the position, the location of the position and the level of remuneration, matched against the circumstances applying to the employee and the redundant role
  • Whether redeployment to these vacancies would have any adverse impact on operational efficiency on the employer
  • If the vacancy is with a different employing entity, the degree of control the employer has in relation to the entity, and
  • The willingness of the employee to be redeployed to the vacant job.

A recent decision of the Full Bench of the Fair Work Commission applied those principles in Skinner & Ors v Asciano Services Pty Ltd T/A Pacific National Bulk [2017] FWCFB 574. The key question in this case was whether it would have been reasonable in all the circumstances for the employees affected by redundancy to be redeployed by the employer offering voluntary redundancies to other employees in order to create vacancies for employees in redundant roles. This was a redundancy process described colloquially as 'swaps'.

The Full Bench ruled there is no general obligation for an employer to implement or facilitate a process whereby employees whose positions are redundant can swap with other employees who wish to volunteer for redundancy. An employer who does not implement such a process will not automatically be found to have failed to meet the 'reasonable redeployment' requirement for the redundancy to be considered to be genuine under FW Act unfair dismissal laws.

However, the Full Bench ruled it was reasonable for the employer in the case before it to allow employees whose positions are redundant to swap with other employees who wish to volunteer for redundancy, given:

  • The employer was a large business employing a significant number of employees who undertake the same role as those being made redundant
  • The number of employees performing the same or substantially the same role – train driving – meant that allowing a swap would not place onerous training requirements on the employer
  • In some cases there were potential swaps possibly available in depots reasonably proximate to the depots in which the redundant employees were working, so the employer would not have been exposed to costs such as those associated with transferring employees
  • The employer had previously allowed swaps in similar circumstances and had even suggested the swaps as a possible option to mitigate the effects of redundancy in the round of redundancies which resulted in the dismissal of the employees.

Therefore the Full Bench ruled it would have been reasonable in all the circumstances for the employer to redeploy a person whose position is redundant, by allowing that person to swap with another employee who wished to accept redundancy. In failing to do this and proceeding to dismiss the employees, the resulting dismissals were found not to be cases of genuine redundancy. That meant the dismissals were open to challenge under FW Act unfair dismissal laws.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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