Can an employee's role be made redundant without prior consultation?

Employer argues it had to prioritise organisational restructure

Can an employee's role be made redundant without prior consultation?

The Fair Work Commission (FWC) recently dealt with the case of a worker who said she was unfairly dismissed because her employer made her redundant without prior consultation.

On 22 March 2021, Alicia English began working at Tee Ink as a Womenswear Designer. Her immediate supervisor was Sinead Finn, who was the Head of Design and Marketing at Tee Ink.

In October 2022, Finn informed English, along with other employees, that she was expecting a child and intended to take maternity leave starting in March 2023, with plans to be away for almost a year.

Finn revealed to English that she had been training her as a potential replacement during her maternity leave and expressed her desire for her to assume her responsibilities during that period.

Finn also indicated her intention to communicate this to Pete de Gail, Tee Ink's founder, with the recommendation that English take on her role.

Co-worker’s maternity leave

Following this conversation, de Gail scheduled a meeting for English around December 2022, to discuss "Sinead’s maternity leave." During this meeting, de Gail proposed that English temporarily assume Finn's role during her maternity leave.

English responded positively to this proposition. The Commission noted that before these developments and before she became aware of Finn's pregnancy, English had negotiated with Mr. de Gail for a salary increase to $100,000 per year, set to take effect in July 2023, in her capacity as a Womenswear Designer.

During the December meeting, de Gail assured English that she would still receive the previously negotiated pay increase to $100,000 in July 2023. However, English expressed her expectation of a higher salary to reflect the increased responsibilities associated with taking on the Head of Design position.

In response, de Gail said that he would need time to consider and respond to English's request for a higher salary.

Additionally, English proposed that Jayden Morgan be hired to fill her existing role as Womenswear Designer.

A week after the meeting, English participated in an interview with Morgan, alongside Finn and de Gail. During this interview, Finn explained to Morgan that English would be temporarily assuming her role while she was on maternity leave. Furthermore, de Gail clarified that the company was seeking a replacement for English's role during this transition.

The employer’s founder expressed his optimism that Tee Ink would experience growth and that there might be an opportunity to retain Morgan in a permanent capacity when Finn returned from her maternity leave.

In January 2023, Morgan officially joined Tee Ink as the Women’s Designer, and her employment contract stipulated her role as a "maternity leave cover" for a minimum of 12 months, with a salary of $65,000. The position description for Morgan's role inaccurately referred to her position as "Online/Ecommerce Manager" and indicated a salary review would occur within 12 months.

During a weekly staff meeting, de Gail informed the staff that English would be assuming Finn's responsibilities while she was on maternity leave, and Morgan would be taking on English's role.

In February 2023, Gabrielle Bate joined Tee Ink as the General Manager and became involved in discussions with English regarding her salary and position.

The transition period

On 11 March 2023, Finn started her maternity leave. While she understood that English would resume her role as Women's Designer after her own return, the transition was not explicitly communicated to her.

Following Finn’s leave, all emails that would typically have been directed to her were rerouted to English. Soon after that, English assumed the responsibilities of the Head of Design. According to her, she performed the duties associated with Finn's role from 13 March 2023, until 29 June 2023.

Meanwhile, according to the employer, starting from the onset of Finn's maternity leave, the marketing team, previously under the supervision of Finn, began reporting to Bate in her capacity as General Manager. This organizational shift was initiated by de Gail, and Bate believed that even if Finn had not taken maternity leave, de Gail would have made the same decision.

The worker’s termination

According to records, on 29 June 2023, English attended a meeting with de Gail and Bate. At the meeting, de Gail said, “This is a really hard decision”. Bate then said, “Your role is being made redundant.”

English asked whether she would be offered to “go back to my Womenswear Designer position?”

Bate explained that they had thought about it, but they believed that Morgan could handle the workload because they were commercialising the designs more, which could be done by a more junior staff member.

English was told that her position was made redundant with immediate effect. She then received her termination letter.

Employer’s lack of consultation under an award

The FWC noted the employer’s reason that it had an organisational restructure that caused the worker’s position to be redundant. However, it examined the award that covered the worker.

“A proper consultation period which complied with the requirements of the Textile and Clothing Award would have lasted a period of two weeks,” the decision said.

“Two weeks is the amount of time which would have been required to give English a proper opportunity to consider the restructure and its impact on her position, including information in writing from Tee Ink in relation to those matters, ask questions about the restructure, have proper discussions with Bate, Smith and de Gail about her appointment to the position of Head of Design and whether it was intended to be a permanent appointment to that role, explain that she had recently signed a new lease on a property and had financial commitments to meet, and suggest that she would be willing to take a pay cut if it meant being put back into the position of Womenswear Designer and retaining her employment with Tee Ink,” it said.

“Tee Ink’s unreasonable and extensive failure to comply with its consultation obligations in relation to English meant that she had no real opportunity to consider and form a view on her possible redundancy and present those views and suggestions to Tee Ink prior to being dismissed,” it added.

Thus, it ruled that the worker’s dismissal was harsh and unreasonable, and ordered proper compensation.

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