All awards/enterprise agreements contain provisions surrounding a consultation process which must occur with employees when there are major changes being made to the workplace. This provision extends to instances such as redundancy.
The requirements of consultation include:
- notifying the employees who may be affected by the proposed changes;
- providing the employees with information about these changes and their expected effects;
- discussing steps taken to avoid and minimise negative effects on the employees;
- considering employees ideas or suggestions about the changes.
As an employer, if the time comes for an employee’s role to be made redundant, the consultation process that occurs must not be reduced to ‘merely telling a worker’ that they have been made redundant.
Such was seen in the recent case of Du Preez v MSWA Limited [2024] FWC 1793, where it was alleged that the redundancy of Mr Du Preez’s position was not ‘genuine’ as per the definition in section 389 of the Fair Work Act 2009 (Cth) due to the failure of adequate consultation.
MSWA, after appointing a new Chief Information Officer, had decided to restructure the business and found that the current position of financial data analyst was too narrow. As a result, the role was being made redundant.
Consequently, MSWA met with Mr Du Preez in October 2023 and informed him of the restructure and redundancy stating that it was to take effect in the next month.
The FWC accepted that the role was being made redundant and that redeployment was not an option. However, the FWC drew attention to the fact that the decision to make plans to restructure the firm first arose as early as June 2023.
In this case, it was reaffirmed by the FWC that consultation does not only occur when a decision has been made to make a role redundant. But rather the consultation which is owed to employees occurs “where there has been a decision to take an action that is likely to have a significant effect on an employee or where there has been a decision to introduce major changes”. As such, the decision in June 2023 triggered the consultation obligations. The FWC made clear the consultation obligations “especially on matters such as redundancy, should never be taken for granted”.
The FWC found that “the failure to consult Mr Du Preez makes the decision to dismiss him unreasonable.” As a result, the FWC agreed that Mr Du Preez was unfairly dismissed. Mr Du Preez was awarded $7,452 in compensation.
This case serves as a reminder to both employers and employees of the importance enforcement of the consultation that must occur when the workplace is undergoing major changes.
If you or your business is going through a major change, reach out to the Workplace Team at Chamberlains for guidance and assistance in navigating your obligations and entitlements.
* This article was prepared with the assistance of Challita Tahhan
If you have any questions or concerns please contact our Workplace Law Director Angela Backhouse on 02 6188 3600