retrenchment

Employers need to consider many alternatives prior to making an employee “genuinely redundant” and whether they qualify for any alternative positions. If an ex-employee were to argue their non-genuine dismissal before the Fair Work Commission citing that other work should have been made ‘available’ to them, the Commission will rehash a list of factors which specify why or why it would not be “reasonable” for their employer to offer an alternative position. The Fair Work Act guides employers in their decision irrespective of the ‘reasonableness’ of insourcing the redundant employee to fill a position usually carried out by external labour hire employees or third-party contractors. This ‘reasonable redeployment’ will consider the employee’s skills, qualifications, experience, location, and remuneration.

Helensburgh Coal had to recently interrogate these factors before the Commission, where a more detailed list was clarified during the hearings:

  • The employer must control the ‘available work’;
  • The length of the ‘available’ work contract;
  • The alignment of the company’s business strategy and the insourcing;
  • The history of contracting in the business;
  • The rights of contractors and their employees; and
  • Whether the skills of the retrenched employee match with the work needing to be performed in the position undertaken by an external provider.

Retrenched employees will greatly benefit from knowing the reasoning behind their role being no longer available, and importantly, whether it was because they were ‘genuinely redundant’, especially in the light of work that may be seen as available that is undertaken by external contractors, and why they were not fit for any alternative positions. Contact Daniel Morgan for advice.

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