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The publication of the General Ruling in 1987 saw the establishment of a test for redundancy as being:
Where an employer has made a definite decision that he/she no longer wishes the job the employee has been doing to be done by anyone, and this is not due to the ordinary and customary turnover of labour, and that decision may lead to termination of employment...
This test was introduced into the Fair Work Act 2009 (Cth) under the National Employment Standards in almost identical terms. The “he/she” lingo was dropped and the employer’s “wish” is now a “requirement”.
In short, a redundancy is a genuine redundancy if the employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the business and there is compliance with any consultation obligation contained in a modern award or enterprise agreement that applies. It will not be a genuine redundancy if it would have been reasonable in all the circumstances for the employee to be redeployed within the employer's business or any associated business.
The operational requirements of the business may include a situation in which the employer has labour in excess of the requirements of the business, where the employer no longer wishes to have a particular job performed, or where the employer wishes to amalgamate jobs. It would also include a business restructure resulting in a position being abolished and the functions or some of them being given to another employee.
The test for genuine redundancy takes out of action any argument about selection or procedural fairness (except for consultation), and establishes a complete defence without any wider regard to fairness.
If the employer fails to consult with the award-level employee then it would not be a genuine redundancy. This does not automatically mean that the dismissal is unfair, just that it is at risk of being subject to an unfair dismissal claim or unlawful termination claim.
Redeployment is also a key requirement for redundancy. It is imperative that the employer considers redeployment opportunities for that employee within not only the business, but related employer businesses. The employer must consider any other jobs to which it would have been reasonable in all the circumstances to redeploy the employee. There are a number of factors that must be considered in this regard.
If you would like any further information please contact Brendan Gaeta on (07) 4771 5664 or email Brendan.gaeta@connollysuthers.com.au