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Unfair dismissal case actually “genuine redundancy”

May 30, 2017

by Sid Sidhu and Troy Wild, NRA legal

Case study: Laura Wrzoskiewicz v Easy Payroll Perth Pty Ltd [2017] FWC 2469

A recent case before the Fair Work Commission highlights the meaning of “genuine redundancy” and when an employee will be unable to substantiate an unfair dismissal claim.

In this case, a payroll officer who worked part-time in Perth was invited to discuss a change to her role in May 2016. During the meeting, she was offered a promotion to Professional Employment Outsourcing (PEO) HR Coordinator, to be confirmed in a meeting on 31 October 2016.

However, around the same time, the business owner met with the Implementation Manager to discuss the operational requirements of the business. The conversation was fuelled by the recent loss of substantial Perth-based contracts and it was determined that they had too many individuals involved in the PEO process.

Additionally, they determined that the payroll duties of the employee could be distributed to other employees who were not operating at full capacity. As such, the business required only one full-time HR Manager to be based in Sydney (where most of the work was required). In the meeting scheduled for 31 October, the employee was advised that her position had been made redundant.

The argument

The employer argued that they encouraged the employee to apply for the full-time position, in Sydney, at various times throughout the consultation process. According to their evidence, the employee was told that her application would be considered a “high priority”. However, the employee communicated that relocation was not an option for her and that she wanted to remain part-time.

In contrast, the employee alleged that she was only given the chance to apply and therefore was not terminated due to a genuine redundancy, as she was not actually offered the role in Sydney.

“Genuine redundancy”

Under section 389 of the Fair Work Act 2009, there will be a genuine redundancy if:

  • the employer no longer requires the person’s job to be performed by anyone due to changes in the operational requirements of the enterprise;
  • the employer has complied with obligations to consult under a Modern Award; and
  • it was not reasonable in all the circumstances for the person to be redeployed.

The decision

Turning to the first element, Commissioner Williams held that “it is quite common for a job to become redundant because an employer decides that the some or all of the duties will in future be done by one or more other employees and/or those duties will be undertaken at a different location.” In light of the evidence, he was satisfied that the employer no longer required the job to be performed by anyone.

Additionally, his Honour accepted that the employer had complied with its consultation obligations under the Clerks Private Sector Award 2010, by notifying the employee of their definite decision and discussing with them (on two occasions) ways of mitigating the adverse effects of the proposed changes.

In relation to the third limb, his Honour referred to the employee’s communication that she could not relocate to Sydney and that there were no other positions available. On this basis, Commissioner Williams held that the dismissal was a case of genuine redundancy, as it was not reasonable to redeploy the employee within the enterprise.

The full decision can be found here.

What does this mean for your business?

Termination due to genuine redundancy is a highly complex and onerous area of law. The NRA can provide assistance and tailored advice to help guide members through the redundancy process and to minimise potential liability during these difficult times. To find out more information, call the NRA today on 1800 RETAIL (1800 738 245).

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