AREEA’s Tasmanian principal employee relations consultant Bill FitzGerald examines what constitutes a genuine redundancy and employers’ obligations for training an employee for redeployment.

THE Fair Work Act 2009 imposed additional obligations on employers to establish a ‘genuine redundancy’ and consult in accordance with modern awards or enterprise agreements.

The more contentious and arguably more onerous obligation on employers is the requirement to demonstrate reasonable attempts to redeploy in the company or associated companies.

Section 389(2) of the Fair Work Act effectively negates the concept of a genuine redundancy:

“If it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or associated entity”

The authority case Ulan Coal Mines Howarth & Ors v Ulan Coal Mines Ltd [2010] FWA 4817 (12 July 2010) examined this complex issue, with the decision focusing on the specific geographical and equivalency matters.

A more recent case Horn v Mastermyne Engineering P/L (2012 FWC) focused on the steps an employer is required to take if redeployment can be successfully achieved after a period of retraining.

In this case, the employee claimed unfair dismissal when the employer claimed a genuine redundancy because of operational requirements following a downturn in the coal sector.

The employer, in accordance with its obligations under S. 389(2), explored options for redeployment but discovered the employee did not meet the legislative requirements to work underground in the short term. The employer declared redeployment was not a reasonable option given the extensive retraining that would need to be provided to the employee, to legally work underground.

The redeployment requirement in the Act does not require the employer to retrain a redundant employee to any alternative position for which they are not immediately qualified or experienced.

The court found there was a significant difference in the coal industry between those who hold underground qualifications and experience and those who do not.

There was no obligation on the employer to overcome the significant gap between the employee’s skills and those required for the available position.

As such, the court found the redundancy to be genuine in accordance with the Act.

Importantly, the court also found that if redeployment to a new field of work required minimal retraining to supplement existing skills, then employers are obliged to redeploy in accordance with the Act, and a redundancy in this case would not be genuine.

Lessons for employers

While employers need to make every effort to redeploy a redundant employee to any available position in an enterprise or that of an associated entity, they do not need to completely retrain the employee for position they are not immediately qualified or experienced in.

Redeployment is only necessary if there is a role that the redundant employee can fulfill with no or minimal training.

This is a complex area of the Fair Work Act as the obligations on employers are quite onerous and what could be regarded as genuine redundancy may be overturned. AREEA advises members seek advice an AREEA Consultant in our various offices before embarking on redundancies.

For more information, contact AREEA principal employee relations consultant Bill FitzGerald on (03) 6270 2256.