In a recent appeal case about a redundancy1, Fair Work Australia ("FWA") rejected an employer’s “assumption” that a manager would be insulted if offered redeployment to a more junior position following a restructure.
What does the Fair Work Act say about redundancy?
The Fair Work Act sets out a number of requirements in order for a dismissal to be considered unfair. One such requirement is that the dismissal must not be a case of "genuine redundancy".
If an unfair dismissal claim is lodged but FWA finds that the dismissal was because of a "genuine redundancy", it will bring the claim to an end.
A dismissal will not have been a genuine redundancy, if it would have been "reasonable" in all the circumstances for the employee to have been redeployed within the employer's enterprise (or an entity associated with the employer's enterprise).
The Jenny Craig dismissal case
In 2011, Jenny Craig Weight Loss Centres ("Jenny Craig") restructured its operations resulting in a female manager's redundancy and dismissal.
Prior to the redundancy, the woman was employed as a Regional Manager. The employee's position involved significant responsibility including hiring and firing staff, as well as the strategic direction and revenue growth of Jenny Craig centres within her region.
The employee challenged her dismissal by lodging an unfair dismissal claim with Fair Work Australia (FWA).
Under the Microscope - The Employer's Actions
During the appeal hearing, it emerged that:
An excuse put forward by the employer for failing to offer redeployment was that an offer of a lesser position, it had assumed, would be taken as a “complete insult” by the employee concerned.
FWA held that the dismissal was not a case of a "genuine redundancy" because redeployment to a Centre Leader position would have been reasonable in all the circumstances.
Factors taken into account by FWA included that:
Lessons for Employers
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