A recent decision of the Fair Work Commission (FWC) highlights the importance of accurately documenting the redundancy processes, including any alternative offers of employment.
In the case before the FWC, the employer had followed what on the surface appeared to be a sound process, including engaging in consultation with the effected employee regarding alternative roles that could be made available. During the consultation process, the employee indicated clearly that the roles being discussed were not suitable and made a counter offer of a role that she would accept as an alternative to redundancy. The role the employee suggested was not accepted by the employer. Having considered the consultation process was now concluded, the employer notified the employee that their employment would be terminated due to the role being made redundant. Also, that they would apply to the FWC to have the severance payment reduced because the employee had not accepted the alternative employment which was offered.
In examining the events which had occurred, the FWC concluded that although there had been “numerous discussions and exchanges” about alternative roles, it was not convinced that those discussions and exchanges had crystallised into an actual offer to the employee. Therefore, in the absence of an offer of an alternative role that the employee subsequently rejected, there was no basis on which the FWC could or should reduce the severance payment. The employee was to be paid the full entitlement of the severance payment.
This case highlights the obligations on an employer during a change process to ensure that their process is not only sound, but that the documentation of the process is thorough. It is not enough to talk about roles that could be created or might be available and assume that the rejection of these options by the employee is sufficient. If there is a genuine redeployment option available, even if the employee has indicated that they are not happy with the option, it is important to formally offer the redeployment opportunity to the employee. The employee’s position in discussions and negotiations may well be different to that which they take when the offer is formal, and the only other alternative remaining is redundancy.
The change process, particularly where roles are lost and employment may also be lost, can be difficult, complex and an emotional process to navigate. It is often useful to have an external expert to assist with the complexity and remove the emotion out of the process.
If you require any assistance with a change process or a restructure leading to redundancies, please contact us on mazarshr@mazars.com.au or 3218 3919.
