'Plain vanilla' redundancies found unfair by FWA

by Stephanie Zillman01 Aug 2012

Circumstances which were described by the HR manager as little more than ‘plain vanilla’ redundancies ended up being a significant legal expense and industrial headache for a construction company, as the workplace watchdog deemed the redundancies unfair.

The case Crema and others v Abigroup Contractors Pty Ltd [2012] FWA 5322 saw four building labourers successfully file an unfair dismissal application following their redundancies. Fair Work Australia found that Abigroup could have redeployed the workers in one of its other divisions and that therefore the redundancies were not legitimate.

According to case notes from specialist law firm Justitia, the project the labourers had worked on came to an end and as there were no vacancies on other projects within the building division, the HR manager explored redeployment options within the company.  While there were 16 vacancies on an alternative project, the HR manager on that project deemed the building division workers to be unsuitable because they were not trained or experienced in civil construction work. As there were no further vacancies within the company, the workers were advised that their positions were redundant and that they were dismissed.

However, Commissioner Anna Lee Cribb found that the employees were “potentially suitable” to work as labourers on the project in the vacant positions because:
 

  • The classification was base level and the same for each of the workers
     
  • The vacant positions were subsequently filled by persons who had first been directed to undertake a 10-week training course and who had required supervision and support once on the job. 
     
  • FWA found it would not have been unreasonable for the dismissed workers to have undertaken the same training, if necessary, to remedy any of the perceived inadequacies that had rendered them unsuitable in the first instance.

In light of her finding that the redundancies had not been genuine, Commissioner Cribb gave the parties an opportunity to hold discussions regarding an appropriate settlement. 

According to Justitia, employers and HR should note the following takeaways:
 

  • When evaluating opportunities for redeployment, consider whether training or “on the job” support might reasonably be provided to enable workers to be successfully redeployed.
     
  • An enterprise agreement or modern award may include an obligation on the employer to consult with employees regarding redundancies – always check these instruments carefully when considering redundancies.
     

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Redundancies: FWA decision creates even more risk
 

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