Bill Fitzgerald

AMMA principal employee relations consultant Bill FitzGerald reviews a recent decision on employer prerogative handed down by the Fair Work Commission, ruling that selection criteria and weightings can be determined by an employer managing involuntary redundancies, with some regulation.

The Facts

ON 18 July 2013, the Maritime Union of Australia (MUA) issued an application to the Fair Work Commission, seeking a dispute settlement regarding the selection criteria and weightings surrounding involuntary redundancy for 62 permanent employees under Patrick Projects, operating on the Gorgon Project.

The application was lodged after the employer and the MUA were unable to reach an agreement on the criteria determining how involuntary redundancies should be administered.

The Decision

Commissioner Danny Cloghan of the Fair Work Commission examined the proposed criteria submitted by both the MUA and the employer, including attendance record, disciplinary record, skills and experience and performance behavior and attitude.

While the employer suggested weightings across four criteria, including skills, safety, performance operations manager rating, the MUA proposed there should only be three criteria under consideration:

  • Skills (with a 98% weighting);
  • Discipline (with a 1% weighting); and
  • Performance (with a 1% weighting).

The Commission determined that it was “inconceivable that an employer would not consider an employee’s past performance, behaviour and attitude in a competitive selection process for promotion. Likewise, it is difficult to envisage an employer wanting to divorce performance, behaviour and attitude when competitively selecting employees for redundancy”.

The Commission ruled the weightings and selection criteria would be balanced as follows:

  • Attendance (15%);
  • Disciplinary record (15%);
  • Skills and experience (35%); and
  • Performance, behaviour and attitude (35%)

In making his decision, Commissioner Cloghan noted management prerogative in deciding weightings “is not entirely unregulated but subject to the principles of fairness”. He added that “the selection process should be fair transparent, easily understood and as objective as possible in the circumstances”.

Implications for Employers

This decision is useful because it provides guidance on weightings and objective selection criteria, but it is clear the tribunals will not regard this as unfettered territory for employers.

The redundancy process can be complex and the implications of the Fair Work Act are very real and onerous. It is recommended that you seek the advice of AMMA Consultants before commencing a redundancy process.

To contact your local AMMA office, click here.

To read the full decision from the Fair Work Commission, click here.