FWA defines redeployment obligation

The Fair Work Act prevents employees who have been made genuinely redundant from making a claim that they have been unfairly dismissed. But in order to show that a redundancy was “genuine”, employers have to satisfy three basic tests.

First, the employer must no longer require the employee’s job to be done by anyone, due to operational requirements. Second, the employer must show that it has complied with any obligations to consult with the employees or their representatives about the redundancy. Thirdly, the employer must be able to defeat any suggestion that it would have been reasonable to redeploy the employee within its operation, or that of a related entity.

A Full Bench of Fair Work Australia has commented extensively on the redeployment requirement, with a decision that provides guidance for employers on how to meet their obligations under the Act. And the Tribunal has found that an employer must do more than simply help the employee find another job.

The case is the latest chapter in the long running dispute over redundancies at Xstrata’s Ulan coal mine in New South Wales.

The Bench pointed to a series of consideration which it considered relevant to the question of whether redeployment would have been reasonable in any particular case:

• The degree of managerial integration between the employer and the associate entity will be relevant;
• The nature of the available positions, qualifications required to perform the role, the employee’s qualifications and skills, the distance of the alternative position from the employee’s home and the remuneration;
• By requiring an employee to apply for and compete for employment in a position with a related entity, an employer may not be acting reasonably, as the employee could simply have been employed directly by the related entity;
• Redeployment involves placing the employee in another position as an alternative to termination for reasons of redundant. Subjecting an employee to a competitive process to fill positions may not be a reasonable attempt to redeploy;
• It follows that if an employee refuses to take part in such a process, it is not necessarily the case that a reasonable attempt at redeployment has been made;
• In order for the redeployment to be reasonable, there must be a position available which is the employee has the skills and competence to perform, perhaps with a reasonable period of retraining;
• Employees who show no interest in the alternative positions may find it difficult to claim that no reasonable attempt at redeployment was made.

The case demonstrates that employers must have legitimate reasons for deciding that a redeployment of an employee is an unreasonable or unsuitable option. Employers who have effective management control of a number of entities should consider an “activist” approach to exploring redeployment opportunities in order to be found to have acted reasonably.