Employers who are implementing redundancies in Australia and who have positions available in overseas associated entities, will now have to consider whether it is reasonable to redeploy affected employees to those overseas entities, following a decision of the Fair Work Commission in late April.
In Alesia Khliustova v Isoton Pty Ltd  FWC 658, a software engineer successfully defended an employer's jurisdictional objection that a redundancy was "genuine" within the meaning of section 389 of the Fair Work Act 2009 (Act).
In 2022, the employer decided to implement an increased technical support presence in India to increase its competitiveness. It was expected that twelve people would be engaged in India. In late 2022, as a result of a number of significant financial challenges, including an unexpected deferment of a contract, the employer decided to reduce its costs base. This included removing a number of positions in Australia and reducing the number of positions it intended to recruit in India.
Section 389 of the Act provides a person's dismissal is a "genuine redundancy" if:
- The person's employer no longer required the person's job to be performed by anyone because of changes in its operational requirements (first limb);
- The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy (second limb); and
- It would not have been reasonable in the circumstances for the person to be redeployed within the employer's enterprise or an associated entity (third limb).
The Commission found that the first limb of section 389(1) was met. However, the final two limbs were not met.
The employer conceded the role was covered by the Professional Employees Award 2020, such that the employer was obliged to consult with the applicant before it made her position redundant. The Commission found that the employer did not satisfy the consultation obligations in the award because when it met with the applicant online (and two affected employees) it simply notified them that their positions were being made redundant.
Further, the next day, the applicant was blind copied into an email from the employer which confirmed the company had made the decision to make multiple positions redundant and specified that their last working day would be one month later.
The Commission noted the following principles from the Full Bench decision in CFMMEU v Mount Arthur Coal  FWCFB 6059 regarding effective consultation:
- A responsibility to consult carries a responsibility to give those consulted an opportunity to be heard and to express their views, so they may be taken into account;
- Consultation needs to be real; it must not be merely a formal or perfunctory exercise;
- The purpose of consultation is assist management by giving it access to ideas from employees, as well as to assist employees to point out aspects of a proposal that will produce negative consequences and suggest ways to eliminate or alleviate those consequences;
- A right to be consulted is not a right of veto;
- The requirement to consult is not satisfied by providing the employees with a mere opportunity to be heard; the requirement involves both extending to affected workers an opportunity to be heard and the right to have their views taken into account when a decision is made.
The Commission described the consultation process undertaken in this case as "perfunctory" and found that the applicant was not given an opportunity to be heard and express her views, such that they might be taken into account in the employer's decision making process.
The employer conceded that its Indian operations were conducted by a related entity and that during the restructure, it continued to recruit for a reduced number of positions in India. The Commission found the work performed by the applicant would have enabled her to perform at least one of the roles in the Indian operation.
The employer gave evidence it did not offer the Indian based role to the applicant because it did not believe she would have accepted it as it was in India and had less remuneration. However, the Commission found that, had the employer consulted properly with the applicant, it may have been advised that she was keen to work in different cultures, was prepared to travel and, despite the lower wages, would have liked to experience the role for two to three months. The Commission cautioned that it is dangerous for employers with redeployment options to "fetter offers based upon their own prejudices."
Accordingly, the Commission found that the employer had a role available in an associated entity and that it would have been reasonable in all of the circumstances for the applicant to be redeployed into that role. The application was referred for further conciliation.
It remains to be seen if this case will be of general application or will be distinguished based its somewhat unique facts. In any event, employers implementing redundancies should not assume employees will not be interested in roles with the same or associated entities, whether interstate or overseas.
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