How far must HR go in redeploying a redundant employee?

by Iain Hopkins,Stephanie Zillman21 Aug 2012

How far must HR go in redeploying a redundant employee?It’s a dilemma for HR – you’ve got to make a role redundant, and there simply aren’t any other roles available commensurate with the employee’s skills, experience and salary band. However, if there are any other roles on the books that could conceivably be offered, Fair Work Australia (FWA) has made its position clear.

A recent hearing before FWA in Melbourne brought to the fore a number of issues in the redundancy equation, following a Melbourne electrical contracting company’s successful defence in an unfair dismissal case.

The case involved the organisation making an office-based role redundant because of financial constraints, and the employer consulted with the employee before making the final decision. In making the role redundant, the employer did not offer a vacant ‘electrical trades assistant’ role – a highly physical role that involved working in a confined space and regularly lifting up to 20 kilograms.  Notably the vacant role also paid about $37,000 less than the employee’s present role. Yet despite the failure to offer the role, the employer remained in the right.

The employee argued that the employer’s failure to consult with her in writing about the redundancy and the failure to offer to redeploy her into the electrical trade’s position made the redundancy unfair. Yet, FWA agreed with the employer that the redundant role and the vacant position were “like chalk and cheese”. Critically, the employer was also able to demonstrate it had sent an email to a number of staff, including the employee, informing them of the vacant position on the same day that their verbal consultation process began. In combination with quality written records of the events around the employee’s exit interview, where she said she was “very happy” with the exit process “and thought it was fair”, the arbitrator ultimately found in the employer’s favour. FWA Commissioner Jones rejected the argument that it was reasonable to redeploy the redundant employee to the electrical trades’ position.

“Taking into account, in particular, the significant reduction in remuneration (around $37,000 per annum) and the vastly different working environment from office-based work to factory floor work, I am not satisfied, notwithstanding the Applicant’s skills and competence to perform the role, that it was reasonable to redeploy the Applicant into the position of electrical trades assistant,” the Commissioner said.

Tips for employers

Redundancy can be a challenging and complex area, and the case law is continuing to evolve. According to one workplace law expert, there are many factors employers must take into account in considering redeployment, including whether the person is suitable for the role, whether they’ve got the skillset and the location of the changed position. “There’s no easily identifiable line in the sand about how far the [geographical] distance is in terms of redeployment. But if it comes back to the views of the employee – and that’s the ace in the pack in this hierarchy of considerations of what is reasonable – if the views of the employee are sought and taken into account the employer is well on their way to answering that question about whether or not it was reasonable to redeploy them,” Murray Proctor from DLA Piper told HC.

Proctor also reassured that the views of employees aren’t in and of themselves the only consideration. “There has to be some business case and reason why the employer would or wouldn’t take the employee on elsewhere – for example the employee just doesn’t have the capability to perform in that particular role,” he said.

The redeployment question becomes complicated if some minor training or up skilling might be all that’s needed.

For further reading on this issue, see related story: 'Plain vanilla' redundancies found unfair by FWA


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