When is there 'genuine redundancy'?
Under the Fair Work Act, a person’s dismissal is a case of genuine redundancy if:
- the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
- the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
The law also says that a person’s dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
- the employer’s enterprise; or
- the enterprise of an associated entity of the employer.
In this case, the worker said she was unfairly dismissed because she got fired even though other employees were still performing her role. Was she terminated without basis?
Background of the case
The employer operates Pandora jewellery retail stores. The worker was employed in the “new” full-time role of sales training officer (STO) under an employment contract dated 8 March 2022.
The terms clarified the contract applied “irrespective of any change to her location, duties, position or reporting lines.”
Additionally, it said the location of the STO role is “field-based,” provided that the worker may be directed to perform duties in other areas after consultation.
According to records, travel is an inherent requirement of the STO role, and the duties of the STO role encompass organising staff inductions, meeting with new hires, transitioning new employees into sales roles, and working with sales managers in-store to facilitate requisite sales training.
It also said the employer might amend her duties from time to time.
The worker was reportedly the only employee in that position. On 30 November 2022, she was dismissed for redundancy. But according to the employer, her role was “still required to be done” since sales training across all stores is still necessary for new and existing sales employees.
Although the employer said that her role was necessary, “it no longer required such sales training to be performed by a standalone role.”
In other words, the employer insisted that “such sales training can be facilitated or undertaken by in-store management or other in-store sales staff, saving the overall business the costs associated with the STO role.”
The employer defended its decision, reporting that the last quarter of 2022 saw a “reduction in sales and customer numbers, driven by rising interest rates, price hikes and inflation,” causing it to determine that “it would not require new or additional staff (beyond ordinary labour turnover) to be employed into the foreseeable future.”
Is redeployment a guarantee? HRD previously reported about the case of an area manager claiming unfair dismissal after the business said his role was no longer required, arguing that he “should have been redeployed.”
Meanwhile, in a similar redundancy claim, the employer was found guilty of breaching the employment contract when it failed to provide the worker with full-time work.
What is the test for ‘genuine redundancy’?
The Fair Work Commission (FWC) said a job involves “a collection of functions, duties and responsibilities entrusted to a particular employee, as part of the scheme of the employer’s organisation.”
In a case of “genuine redundancy,” the Commission explained, “the test is not whether the person’s duties or responsibilities (or some of them) survive or remain. Rather, the test is whether the whole of the job previously performed by an employee (unmodified) still exists.”
“[The] focus is to be placed upon the job, not the duties involved in that job, or the individual performing that job (or a new/modified job),” the FWC said.
“An employee may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by another employee, or other employees,” it added.
More importantly, the Commission also noted that there were suitable positions that the employer offered where the worker could have been redeployed into, “but she chose to reject such redeployment options.”
Thus, although the employer admitted that her duties were still important since sales training was still required across its stores, it maintained that it could still fulfill it through other employees.
Ultimately, the Commission said it was a case of genuine redundancy, and the worker was not unfairly dismissed.
