Employment Law – Redundancy and Job Swaps

Background: Redundancy and Job Swaps

The Fair Work Commission decision in Skinner v Asciano Services Pty Ltd serves as a warning for employers to consider all redeployment possibilities, including voluntary job swaps, before making an employee redundant.

Facts

In essence:

• Pacific National was experiencing a reduction in workload due to reduced export grain demand, client loss and the closure of a key site
• consequently, its national operational requirements changed in its bulk haulage division
• Pacific National Bulk (PNB) made multiple positions redundant, both voluntarily and forced
• PNB followed a redeployment process for affected employees, specifically those whose employment was involuntarily terminated, whereby they held consultation meetings and advised of available internal transfer opportunities
• despite the redeployment process, in the original decision, nine employees who were train drivers before being made redundant filed unfair dismissal applications, arguing that their redundancies were not genuine under the Fair Work Act
• the Fair Work Commission was initially satisfied that there was a genuine redundancy in each case, and it was not reasonable for PNB to deploy the employees
• seven employees appealed the original decision of the Fair Work Commission by primarily arguing that the PNB had failed to comply with its redeployment obligations under the Fair Work Act

Fair Work Commission Decision

The Fair Work Commission on appeal:

• overturned the initial decision of the Fair Work Commission
• found that PNB had breached its statutory obligation under the Fair Work Act to explore redeployment options by failing to consider the possibility of job swaps for the affected employees
• stated that whilst there is not an obligation on an employer to implement job swaps, they should still consider whether it is reasonable in the circumstances of the workplace
• considered the following five factors in coming to decision that PNB should have offered job swaps
• one – PNB was a large company with a large amount of employees who undertook the same role to those who were made redundant
• two – numerous employees performed the same role of train driving which meant that in allowing swaps PNB would not face onerous training requirements
• three – there were potentially job swaps available in depots that were reasonably close to depots where some of the affected employees worked. This meant PNB would not have costs associated with transferring the employees
• four – PNB had already canvassed job swaps as a possibility to mitigate the effects in the round of redundancies which resulted in the employees dismissal
• five – PNB had previously allowed job swaps in similar circumstances

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

• carefully consider the impact of this Fair Work Commission decision when considering redundancies
• consult with employees as to all possible options for redeployment before terminating their employment for redundancy reasons
• this includes exploring whether the employee can swap their employment position with another employee who wishes to accept a voluntary redundancy of their employment position
• update employment law policies, especially those relating to termination of employment and redundancy, in response to this Fair Work Commission decision
• seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
• ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations
• raise any employment law questions with an employment lawyer

More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers.