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Fair Work Commission upholds redundancy on appeal

Submitted on Thursday, 9th November 2017

The Fair Work Commission (the “Commission”) has found a Pest Control Branch Supervisor’s role was genuinely made redundant within the meaning of the Fair Work Act 2009 (Cwth) (“Fair Work Act”).

The worker, who had previously been engaged by the business as an independent contractor, secured ongoing employment with the business as a Branch Supervisor in Darwin in June 2016.  In the months that followed the business was sold.  The worker was informed of the sale and told it was “business as usual”. However, several months later the Darwin branches were merged.  Following the merger the worker was required to report to the business’ Northern Territory Manager who in turn reported to a reported to the General Manager.  

The relationship between the worker and the Territory Manager deteriorated. This was due to disagreements about technical aspects of pest control and an issue regarding vehicle maintenance. It was this particular disagreement which motivated the worker to notify the CEO.

In January 2017, the worker was advised his role was being made redundant. His employment subsequently ended in February 2017.

The worker submitted an unfair dismissal claim, arguing he was selected for redundancy because he had “stirred the pot” by arguing with the Territory Manager and making a complaint to the CEO. The worker also argued the process followed by the employer was inconsistent with the consultation requirements mandated by the applicable Modern Award.

The Commission considered the validity of the claim by scrutinising the employer’s process in order to assess whether or not it complied with the requirements of the applicable Modern Award and the Fair Work Act.

Evidence was adduced which demonstrated the employer followed a consultation process by notifying the worker in writing his role was redundant and discussing the matter with them in person. The discussions took place between January and February 2017 in the form of both verbal and written communications. During the discussions the employer offered redeployment in the form of a lower status Pest Technician role as well as the opportunity to become an independent contractor. The worker rejected the Pest Technician role on the basis it would put him in a “very hard position financially”. The worker did make a counter offer which included a guaranteed weekly wage higher than that in the standard independent contractor arrangement.  The worker’s counteroffer was rejected.  This rejection led to the redundancy being finalised and the worker’s employment terminating on the 10th February 2017, 15 days earlier than originally advised.

In addition to the process, it was necessary for the Commission to consider the reason for the redundancy.  The Commission was satisfied the redundancy was a consequence of an organisational restructure. Importantly the redundancy was not because of the worker’s complaint. Overall, the Commission found that the employers’ process satisfied the obligations under the legislation. In view of this the Commission deemed the dismissal was a genuine redundancy.  The Commission dismissed the worker’s Unfair Dismissal Application.

The decision was appealed. The worker argued the process was insufficient and the reason for redundancy and/or bringing the effective date forward was because he had “stirred the pot”.

On appeal it was noted the employer denied making such a comment. The Full Bench of the Fair Work Commission (“Full Bench”) also noted at first instance the Commission did not make a ruling on whether or not the statement was made.  Nonetheless the Full Bench was satisfied the reason for the redundancy was the restructure. Similarly, the Full Bench was satisfied the consultation requirements had been met given the worker: was notified of the redundancy once a decision had been made; had been provided with written information; and had been involved in a discussion around the impact of the redundancy.

In relation to redeployment, the worker flagged the employer had not considered work outside of Darwin. Having considered the evidence the Full Bench found there was no evidence positions outside of Darwin were available. Finally, the worker argued the employer’s decision to bring forward the date the redundancy would take effect was inconsistent with the consultation requirements indicating it was fuelled by the worker’s complaint.  Again, the Full Bench rejected this argument and was satisfied the employer had complied with the requirements set out in the Modern Award and Fair Work Act.  Overall, the Full Bench upheld the redundancy and dismissed the application.

Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claim.

Written by Stephanie Beckett

Fair Work Commission Decision (U2017/2308)

Fair Work Commission Decision (C2017/4777)

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