Marion Cole

Redundancy: redeployment considerations

Marion Cole

9 October 2013

Employment Disputes

A recent decision of the Fair Work Commission (FWC) has indicated the extent to which an employer must consider redeployment, particularly in the context of international operations.

Brian Roy v SNC-Lavalin Australia Pty Ltd [2013] FWC 7309

 

Roy was employed as a Senior Designer – Mechanical in the Brisbane office of SNC-Lavalin Australia (SNC). Due to a significant downturn in work, SNC made all of its four Senior Designers redundant. Despite being under no obligation to do so, the SNC engaged in a prolonged period of consultation with the relevant employees; however no further opportunities were available for the purpose of redeployment.

 

After termination, Roy claimed that he had been unfairly dismissed on the basis that his employer had not redeployed him within the enterprise of an associated entity. This included redeployment to a number of associated entities of SNC which were based overseas.

 

In relying on section 389(2) of the Fair Work Act 2009 (the Act), Roy claimed that the employer did not take steps to consider whether it was viable to redeploy the affected employees. On that basis, Roy argued that there had been no genuine redundancy for the purpose of the Act and his dismissal should be regarded as unfair.

 

The FWC considered the “reasonableness” of Roy’s argument and determined that it was not reasonable to redeploy him to an international role because:

  • SNC never held out that it was able to redeploy redundant employees to international locations;
  • while there had been previous ad hoc arrangements whereby redundant employees had resigned from SNC, applied for an international position and relocated at their own expense to take up that position; there was no formal process around this option;
  • the cost of relocating Roy to an international location would have created an unreasonable financial burden on the employer;
  • there was no central control of recruitment or human resources in the SNC or its associated entities; and
  • the difficulties in comparing terms and conditions of employment between different jurisdictions.

DP Richards held that it would not have been “reasonable” for the employer to redeploy Roy to an international office and dismissed Roy’s unfair dismissal claim.

 

In considering redeployment options for employees whose positions have been made redundant, employers must also consider junior or lower remunerated positions.

 

In the Full Bench decision of Jenny Craig Weight Loss Centres Pty Ltd v I Margolina [2011] FWAFB 9137, a failure by the employer to offer the employee a less senior role with significantly fewer responsibilities and a greatly reduced salary meant that the employer had not discharged its duties in relation to redeployment and the dismissal was therefore unfair.

 

All unfair dismissal cases turn on their facts; however employers facing the prospect of making positions redundant must ensure that they consider all available positions within their entity, or any associated entities, before terminating the employment of any employees. The obligation to consider redeployment does not necessarily extend to internationally-based associated entities; however it does extend to junior or lower paid roles.