'Redundant' general manager claims suitability for new executive role

Manager questions employer's failure to redeploy him to a different position

'Redundant' general manager claims suitability for new executive role

The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who claimed that his dismissal was not a case of genuine redundancy.

The worker argued that his employer failed to properly consider redeploying him within the enterprise, and thus did not meet the requirements set out in the Fair Work Act 2009 (Cth).

In this case, the worker's employment was terminated after the employer decided to restructure the organisation due to a change in its activities.

While the employer claimed that the dismissal was a genuine redundancy, the worker maintained that he should have been considered for redeployment to the newly created role of Executive Officer.

Dismissal amid restructuring

The worker was employed as the general manager of the organisation from April 2021 until his employment was terminated on 30 August 2023.

The employer underwent a restructure due to a fundamental change in the nature of its activities, which led to the worker's position being abolished.

The employer decided to continue operating, but with a different focus on providing its programs. As a result, the Board resolved to create a new role of Executive Officer to oversee the organisation's future activities.

The worker submitted that the employer failed to properly consider redeploying him within the enterprise, and argued that he was never consulted about the proposed redundancy of his position and that he would have been suitable for the newly created Executive Officer role.

Worker advocates for redeployment

The worker relied on several FWC decisions, including Ulan Coal Mines Limited v Honeysett et al, which emphasised the importance of employers considering redeployment options. The Full Bench in the Honeysett case observed that:

"The question remains whether redeployment within the employer's enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant.”

“They include the nature of any available position, the qualifications required to perform the job, the employee's skills, qualifications and experience, the location of the job in relation to the employee's residence and the remuneration which is offered," the decision said.

On the other hand, the employer submitted that the worker's position was no longer required and provided a comprehensive outline of the factors that led to its decision.

The employer argued that the worker was not suitable for the Executive Officer role, as he lacked the necessary qualifications and experience in developing its necessary programs.

FWC: proper consultation lacking

The FWC's emphasised the importance of employers properly consulting with employees and considering redeployment options before making redundancies.

The FWC accepted that there was a need to restructure the organisation based on the evidence submitted by the employer. However, the key issue in this case was whether the employer had discharged its onus (burden) to establish that it was not reasonable to redeploy the worker.

The FWC found that the employer had not properly consulted with the worker about the proposed redundancy and had not adequately considered redeploying him to the new Executive Officer role.

The FWC said that employers should not assume how a redundant employee will respond to an offer of redeployment to a lower-paid position and should instead consult with the employee if such a position is available.

As Commissioner Ryan stated in Iryna Margolina v Jenny Craig Weight Loss Centre Pty Ltd:

"Prudence would suggest to any employer that an employer should not presume to know how a redundant employee will react to an offer of redeployment to a lower paid position. Prudence would also suggest to an employer that even if the employer has no modern award or enterprise agreement obligation to consult an employee about a redundancy that the employer should consult with the employee."

Genuine redundancy

Despite the employer’s failure to consult the worker, the FWC found the Board’s decision served as a “compelling reason” to consider his termination as a genuine redundancy.

“[The employer] had previously been the administrative body responsible for supporting the Guumbarr Trust which was established as part of the Browse LNG Precinct Project Agreement. The role of administering the Trust was removed from the [employer] by a decision of the Western Australian government in June 2023,” the FWC said.

“The Board has, quite properly, considered the issue of the very survival of the organisation, and has decided to seek to be a provider of education programs. In doing so, it has understandably sought to employ someone who can design, implement and market those programs,” it added.

“Based on their knowledge of the [worker’s] skill set, they have arrived at what appears to be for them the inescapable conclusion that he does not have the attributes they are seeking, notwithstanding that he has clearly demonstrated considerable abilities in other areas during his time with the [employer],” the FWC said.

“Although the [worker] disagrees with the Board’s assessment, I find that I should prefer the collective view of the Board, expressed in the evidence given to the FWC by three of its members, with regard to the human resources needs of the [employer] in its changed circumstances,” it added.

Thus, since the restructuring was a matter of “survival” for the employer, the worker’s dismissal was found to be a genuine redundancy. It then dismissed his application against the employer.

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