Should I be consulted when my role is made redundant, and what impact does JobKeeper have on the consultation process?

Should I be consulted when my role is made redundant, and what impact does JobKeeper have on the consultation process?

The effect of the COVID-19 pandemic has been far-reaching – it has impacted both employers and employees alike. The disruptions are likely to be far-reaching for months, if not years, to come. Accordingly, legislators have put in place new workplace laws to allow flexibility in employment, ensuring that employers and employees can remain agile during this difficult period.

However, in recent decisions, the Fair Work Commission has continued to emphasise the focus on procedural fairness, in particular the obligation of employers to consult in the event of redundancies, as a cornerstone to the Australian industrial relations system.

Section 389 of the Fair Work Act 2009 (Cth) sets out circumstances in which a redundancy will be genuine. An often-overlooked element requires employers to comply, ‘with an obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy’. Most modern awards contain a consultation provision concerning significant effects on an employee’s position, which includes the termination of employment. Employees should make sure to review their relevant modern award or enterprise agreement.

The impact of JobKeeper and consultation requirements

The JobKeeper legislation was introduced to ensure that the relationship between employer and employee remained in place. In two recent cases, the Fair Work Commission has emphasised the importance of the interaction between JobKeeper and consultation.

In Matthew Browne v MySharedServices Pty Ltd [2020] FWC 4445 (26 August 2020), Commissioner Bisset found that, notwithstanding the company no longer required the employee’s role to be performed by anyone (see [27]), his dismissal was not a case of genuine redundancy. Mr Browne’s dismissal was found harsh and unjust, as the company did not comply with the consultation obligations in the Clerks Award (see [34]).

Mr Browne was not consulted with and was informed of the termination of his employment by reasons of redundancy on 9 April 2020. This was the first time he was made aware his role had been impacted by operational changes, and no discussion occurred regarding the impact of the operational changes, or what steps could be taken to mitigate the effects of the change.

Importantly, Commissioner Bisset made clear that the lack of consultation did not allow Mr Browne an opportunity to discuss JobKeeper with his employer, which had been announced just over a week prior on 30 March 2020 (see [33]). Commissioner Bisset emphasised that the importance of JobKeeper was ‘to ensure employees and their employer maintained a relationship, to minimise job loss and minimise redundancies’ (at [56]).

In Rachael Freebairn v Dandiie Pty Ltd ATF the DM & IT Moore Family Trust, TJL Business Advisors Pty Ltd ATF the Lumtin Family Trust, and Profitwatch Pty Ltd ATF the Rosemark Trust T/A TJL Business Advisors and Accountants [2020] FWC 3915 (27 July 2020), Deputy President Saunders found that, notwithstanding the company no longer required Ms Freebairn’s role to be performed by anyone because of changes in operational requirements, the redundancy of her role as an Administrative Assistant was non-genuine due to a failure to comply with consultation requirements in the Clerks Award (see [32]).

Importantly, it was found at [58] that ‘compliance with [the company’s] consultation obligations would have resulted in Ms Freebairn remaining in employment for a period of time, supported by the JobKeeper program…

Meaningful Consultation

The Fair Work Commission also continues to emphasise that the consultation must be ‘meaningful’ (see e.g. National Tertiary Education Industry Union v Deakin University [2020] FWC 4013 (30 July 2020) at [32], [52]-[55] and [62]-[64])) and specific to employees circumstances. This is of paramount importance where COVID-19 may lead to a large number of redundancies at a time.

The importance placed on individual circumstances continues to emphasise that employees should ensure to review their relevant modern award or enterprise agreement and seek legal advice concerning their specific circumstances.

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