When is a redundancy not a “genuine redundancy”?

If Fair Work Australia (FWA) is satisfied that a dismissal was for reasons of genuine redundancy, then the dismissed employee cannot claim unfair dismissal under the Fair Work Act 2009. 

“Genuine redundancy” is defined by s 389 of the Act.  That definition extends beyond the usual meaning of redundancy, and brings in considerations of whether the employer complied with any obligation to consult, and whether the employee could have been redeployed to another position.

A dismissal will only be a genuine redundancy for the purposes of the unfair dismissal provisions of the Fair Work Act 2009 where each of the following three conditions is satisfied.

1. The employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. What is critical is whether the employee’s position continues to exist, not whether the duties which are formally part of that position are still required: Ulan Coal Mines Limited v Howarth [2010] FWAFB 3488.  This first condition reflects the traditional meaning of redundancy.
2. The employer complies with any obligation to consult about the redundancy prescribed by a modern award, enterprise agreement, transitional instrument or Division 2B State instrument that applies to the employment (the need to comply with the obligation to consult in any applicable transitional instrument or Division 2B State instrument derives from the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009). 
3. It is “reasonable in all the circumstances” for the employee not to be redeployed within the employer’s enterprise or the enterprise of any associated entity (as defined in s 50AAA of the Corporations Act 2001).  The words “reasonable in all the circumstances” need to be applied by reference to the facts of the particular case.  There can be no absolute rules about what will or will not constitute an employer’s obligations (compare: Mr M v LD Pty Ltd [2009] FWA 1676; Mr Bruce McAlister v Bradken Limited [2010] FWA 203; Sriharsha Manoor v United Petroleum Pty Ltd [2010] FWA 2571; Kristina Iannello v Motor Solutions Australia Pty Ltd [2010] 3125).

Non-compliance with s 389 does not automatically render a dismissal “unfair”.  Rather, it simply means that an employee has the opportunity to argue that their dismissal was unfair notwithstanding that it was for reasons of ‘redundancy’.

The Employment Law Guide explains all of the unfair dismissal provisions of the Fair Work Act 2009, and contains commentary and references to case law concerning the making and defending of such claims, as well as links to appropriate FWA forms.  Other topics in the Employment Law Guide concerning dismissal include: unlawful dismissal, the protection of workplace rights (general protections) and common law claims for dismissal in breach of contract.

By Gerard Boyce & Paul Moorhouse