There is good news for employers who are faced with the difficult prospect of having to make redundancies and the process of selecting who is going to be made redundant.
In the past, employers have often selected employees for redundancy based on a particular objective criteria, such as the ‘last in, first out’ principle or compared individuals based on their level of skill, experience, and training in order to prove they were unbiased in their selection criteria and process.
However, a number of employers are unaware that back in 2012, Fair Work Australia ruled1 that where a position has become genuinely redundant, the selection process used to choose the particular employee(s) to be made redundant is irrelevant when it comes to determining the “fairness” of the dismissal. This means that as long as the redundancy is found to be “genuine”, employees are not able to make a successful unfair dismissal claim in relation to their termination under the Fair Work Act 2009 (“the Act”).
So what makes a redundancy “genuine”?
The following requirements must be met:
- The termination must be for operational reasons (e.g. the business introduces a new technology which leads to the job being done by a machine, lower sales or production, relocation, restructure/reorganisation after a merger or takeover, or insolvency or bankruptcy); and
- The employee’s position must no longer be required to be performed by anyone; and
- The employer must have complied with any applicable modern award or agreement obligation to consult with the employee about the redundancy; and
- The employer has considered redeployment opportunities within the business (or an associated entity), and has offered the employee any such opportunity
What this means for employers, is that where there is a group of employees all employed in the same role and the employer has identified that the particular role is genuinely redundant, the employer has the ability to select any of the employees for redundancy without fear of unfair dismissal, as long as the above requirements for “genuine redundancy” are followed and met.
1 UES (Int’l) Pty Limited v Leevan Harney [2012] FWAFB 5241
http://www.addisonslawyers.com.au/knowledge/Who_Do_I_Select_to_Make_Redundant488.aspx