Are you Considering Redundancies?
with Sarah Tilby
As hospitality venues grapple with the potential long-term impacts of COVID-19, many employers may be re-evaluating their required staffing levels. The Employment Relations Department has been fielding many calls from QHA members who are undertaking structural reviews of their business, particularly in relation to staffing levels.
If you are considering making one or more positions in your workplace redundant, it is very important to follow a process that aligns with the definition of a genuine redundancy as per section 389 of the Fair Work Act 2009 (‘FW Act’). Section 389 of the FW Act is reproduced below:
Section 389 - Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) 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
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.
The importance of adhering to the definition of a genuine redundancy as per the FW Act if considering redundancy of one or more positions, is for multiple reasons:
1. If the employee (if eligible to do so) makes an unfair dismissal claim, the employer could have the grounds to lodge a jurisdictional objection to the claim. A jurisdictional objection involves an employer arguing that the Fair Work Commission (‘FWC’) does not have jurisdiction to deal with the unfair dismissal claim, or in other words, does not have the power to deal with the claim. If the FWC finds that a person’s dismissal was a result of a genuine redundancy, (note: the FWC needs to be satisfied with this after considering the submissions of the employer, so evidence substantiating a claim of genuine redundancy is important) then the FWC will have no power to deal with the claim, and the claim would be dismissed.
2. In addition to reducing the risk of an unfair dismissal claim, following a process that aligns with the definition of a genuine redundancy can also reduce the risk of a general protections or a discrimination claim. This is because evidence of a process that is consistent with a genuine redundancy as defined in section 389 of the FW Act, can also potentially assist in the rebuttal of a claim (if made) from a dismissed employee, that they were dismissed because of:
(a) a workplace right (e.g. right to make a complaint/enquiry about their employment, or right to access leave entitlements, etc) exercised by the employee, or
(b) because of a protected attribute held by the employee (e.g. gender, race, family/caring responsibilities, etc).
Even though COVID-19 may have had a huge impact on the operations of many employers in Australia, the ability for a dismissed employee to lodge a claim in relation to their employment has not been affected.
It has been reported that the Fair Work Commission has had an increase in unfair dismissal claims of ‘more than 70 per cent’ during the COVID-19 crisis.1
The QHA has fact sheets on redundancy, as well as on consultation requirements under the Hospitality Industry (General) Award 2020 (‘HIGA’), which contain detailed information to assist you with undertaking a procedurally fair and genuine redundancy process. The focus of this article is in relation to compliance with the definition of a genuine redundancy as per section 389 of the Fair Work Act 2009, however it is important to also comply with any applicable notice of termination and redundancy pay requirements – these issues are discussed in the QHA fact sheet on redundancy which is available to members.
As the content of this article is only a general summary in relation to redundancies, it is important that employers should assess their own circumstances on a case-by-case basis and seek advice where appropriate.