Where an employee has been dismissed from their employment, their employer may seek to resist certain claims by asserting that the dismissal was a case of genuine redundancy.

Indeed, where it has been alleged that an employer has unfairly dismissed an employee, and the reason advanced for the dismissal is that the employee’s position was made redundant as a consequence of changes in the operational requirements of an employer’s enterprise, the employer will likely seek to avail themselves of the defence at s 385(d) of the Fair Work Act 2009 (Cth) (FW Act).

Section 385(d) of the FW Act provides that for the Fair Work Commission to be satisfied that the employee was unfairly dismissed, amongst other things, the dismissal must not be a case of genuine redundancy.

When will a dismissal be found to be a case of genuine redundancy?

Section 389(1) of the FW Act provides that a person’s dismissal was 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 immunity afforded to employers by s 389(1) of the FW Act however is not absolute; it is subject to s 389(2) of the FW Act, which provides that a person’s dismissal will not be found to be a case of genuine redundancy if it would have been reasonable in all of the circumstances for the person to be redeployed within:

• the employer’s enterprise; or
• the enterprise of an associated entity of the employer.

When will redeployment be considered reasonable in all of the circumstances?

Relevant authorities provide the following guidance on this matter.

Firstly, in order for the Fair Work Commission to find that redeployment was reasonable in all of the circumstances, it would need to be satisfied, that more likely than not, there was a job, a position, or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all of the circumstances to redeploy the dismissed employee.

Secondly, any assessment of reasonableness must be conducted with reference to the time at which point the employee was dismissed.

Thirdly, several matters are capable of being relevant to the assessment of reasonableness, including however not limited to:

• the nature of the position(s) available;
• the skills and qualifications required to competently perform the work;
• the experience, skills, and qualifications of the dismissed employee;
• the location where the work will be performed in relation to the usual residence of the dismissed employee;
• the remuneration that is offered for the work.

With respect to the skills required to perform the work in question, the dismissed employee ought to have the required skills at the time, or be capable of acquiring the skills within a reasonable period of retraining.

Fourthly, if an employer is minded to open a suitable vacant role to applications from external candidates and require the dismissed employee to compete for the vacant role, the employer runs the risk of the Fair Work Commission finding that it would have been reasonable in all of the circumstances to redeploy the dismissed employee into the suitable role.

Fifthly, if an employer seeks to assert that there was no suitable position, role, or work available for the purpose of redeploying the dismissed employee, the employer will not be able to discharge the burden at s 389(2) by simply asserting that there was no work – it would need to lead evidence in respect of the positive steps it took to identify other work which could be performed by the dismissed employee, including any consultation undertaken with the dismissed employee about potential work, or indeed the absence of potential work.

Sixthly, where the only position available for redeployment is one that attracts a lower level of remuneration as compared to the employee’s redundant position, employers should not presume that the position is unsuitable or that the dismissed employee will not be open to accepting an offer of redeployment to that position.

It has been held that s 389(2) of the FW Act employs ‘unmistakeably broad terms’, and the use of the word ‘all’ in the expression ‘in all [of] the circumstances’ suggests that it was not intended by the legislature that a restrictive approach ought to be adopted when assessing whether redeployment would have been reasonable in all of the circumstances.

An example of this can be seen in the recent decision of Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45, where the Full Federal Court held that it was open to the Fair Work Commission to exercise its discretion as a specialist statutory tribunal to find that it was reasonable in all of the circumstances for the employer in that matter to redeploy each of the dismissed employees to roles or positions that were, at the time of dismissal, being undertaken within the same work site, by employees of external contractors engaged by the employer – that is, it would have been reasonable in the circumstances for the employer to reduce the work available to contractors and to redeploy the dismissed employees to undertake the work thereby created.

If you are an employer seeking to dismiss an employee as a consequence of their role being made redundant, or are an employee who has been informed that your role has been declared redundant, given the complexities associated with lawfully implementing organisational change, it is essential to proactively seek professional legal advice at the earliest opportunity if you have any concerns.

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The information in this Insight is of a general nature; it is not, and not intended to be, legal or other professional advice.  You should always obtain specific advice before acting on any information in this Insight.

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