Less experienced colleagues retained while senior project manager made redundant
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application from a project manager who challenged his redundancy.
The case arose when the engineering services company made the worker's east coast position redundant following project completions and operational losses, leading to arguments about whether financial evidence adequately supported the business decision.
The worker argued his dismissal was not a genuine redundancy, challenging the employer's financial evidence and claiming insufficient justification for eliminating his position while maintaining similar roles on the west coast.
He contended that operational performance was better than claimed and that redeployment to existing positions held by less experienced colleagues would have been reasonable.
Project-based operations create redundancy vulnerability
The employment relationship involved a project manager responsible for end-to-end project management, budgeting and forecasting for multimillion-dollar scopes, staff management, and client engagement across major projects, including Anglo American and Inpex operations.
The worker's role focused on project work requiring coordination between technical teams, business development support, and commercial oversight to ensure profitable project delivery.
The company's evidence showed that its two most recent East Coast projects had wound up by November 2024, with heavy operational losses from October 2024 onwards affecting business sustainability.
Financial evidence revealed declining revenue and profitability across East Coast operations, prompting management to review staffing requirements and long-term viability concerns.
A February 2025 review of national operations identified underperformance and a lack of ongoing or forecasted projects scheduled across east coast operations, leading to structural changes required for long-term viability.
Management determined that insufficient operational activity could not justify maintaining existing personnel numbers, particularly given sustained business activity decline and absence of confirmed prospective client work.
Financial evidence supports operational changes
The employer provided sales and gross profit figures from January 2024 to June 2025, demonstrating financial performance across operations subject to non-publication orders.
Evidence showed that certain roles within east coast operations were no longer financially sustainable and could not be supported by revenue generated from client fees, particularly following heavy losses in January and February 2025.
The worker challenged the adequacy of financial evidence, arguing that documents lacked meaningful breakdowns typically expected of internal financial performance reports and failed to address overhead costs or role contributions to cost recovery.
He also referenced a $600,000 settlement with Anglo American regarding disputed invoices that should have improved east coast profitability.
The Commission found the employer's evidence plausible and satisfactory, noting that the task was not to conduct a merits review of the redundancy decision but to determine whether operational changes genuinely occurred.
The financial evidence exceeded mere assertions and demonstrated legitimate business concerns about east coast sustainability, even if the worker disagreed with the comprehensiveness or strength of justifications.
Redeployment arguments fail reasonableness test
The worker argued the employer should have redeployed him to a West Coast project manager position, asserting that existing West Coast project managers were less experienced and that displacing one of them would have been reasonable.
This argument challenged the selection process for determining which employees to make redundant rather than questioning whether genuine redundancy requirements were satisfied.
The Commission applied established principles that genuine redundancy provisions do not require employers to displace existing employees to accommodate redundant workers.
The legislation specifically excludes consideration of selection processes for individual employee redundancies, focusing instead on whether positions genuinely ceased to be required due to operational changes.
Legal precedent established that redeployment would rarely be reasonable if it required terminating another employee whose position remained necessary for business operations.
The worker's argument essentially sought review of management's decision about which project manager to retain, falling outside the scope of genuine redundancy analysis under current legislation.
Consultation requirements satisfied
The worker's employment was not covered by any modern award or enterprise agreement requiring specific consultation obligations about redundancy decisions.
This satisfied the consultation requirements under section 389(1)(b) of the Fair Work Act 2009, as no applicable industrial instruments imposed consultation duties on the employer.
The absence of formal consultation requirements simplified the genuine redundancy analysis, allowing focus on whether the position was genuinely no longer required due to operational changes.
The Commission noted that consultation obligations only apply where specifically required by applicable awards or agreements, rather than creating general consultation duties.
The employer provided appropriate notice and explanation of redundancy decisions without being legally required to engage in formal consultation processes.
This approach satisfied legislative requirements while allowing management flexibility in implementing necessary operational changes.
Employer's genuine redundancy defence succeeds
The Commission determined that all three elements of genuine redundancy were satisfied: the worker's job was no longer required due to operational changes, consultation requirements were met, and redeployment was not reasonable in the circumstances.
The decision emphasised that genuine redundancy provides a complete defence to unfair dismissal claims when statutory criteria are satisfied.
The FWC rejected arguments challenging the adequacy of financial justifications, noting that the legislation does not require optimal or commercially necessary decisions, only genuine operational changes.
Management's decision to reduce east coast workforce based on project completions and financial performance constituted legitimate operational requirements justifying position elimination.
