The COVID-19 pandemic has created new challenges for the workforce, as employers adapt to constantly changing conditions. In a recent decision, the Federal Court found that an employee whose hours were unilaterally reduced by their employer was entitled to redundancy pay. Due to reduced operational requirements, Broadlex Services Pty Ltd (‘Broadlex’) informed a full-time cleaner that her hours would be reduced from 38 hours per week to 20 hours per week, with a proportionate salary reduction. The employee refused to sign a form consenting to the change but began working the reduced hours, considering it to be her only option. The National Employment Standards as set out in section 119 of the Fair Work Act 2009 (Cth) provide that an employee is made redundant where their employment is terminated at the employer’s initiative because it no longer requires the job to be done by anyone. Based on this definition, the Court found that the employee was in fact made redundant and therefore she was entitled to redundancy pay. The Court reasoned that by unilaterally reducing the employee’s hours, Broadlex had repudiated her employment contract and that repudiation was accepted by her declining to sign the consent form. The employee had in fact been employed as part-time under an entirely new contract. This decision serves as an important reminder for employers to carefully consider how they go about reducing an employee’s hours. Contact Daniel Morgan at M+E for further information and advice on your employment matters.
