Breach Of Consultation Requirements – Not A Genuine Redundancy

A year later, a new Chief Information Officer (CIO) was appointed and decided to review the structure and performance of the data, analytics and reporting team.

Following the review, an email from the new CIO to senior staff summarised changes for the team, including that ‘the position of Financial Data Analyst is too narrow in scope and skill set, so is redundant in the new structure’ and stating that other roles were created in the team’s hierarchy.

Six days after the email was sent, the CIO and another senior manager met with the financial analyst and told him of the organisation’s decision to make his role redundant. Further meetings were held in the weeks that followed, where the financial analyst unsuccessfully applied for the new position of Senior Data Analyst.

The worker claimed his dismissal was unfair and did not comply with the definition of genuine redundancy in s 389 of the Fair Work Act 2009, which stipulates that for a redundancy to be genuine, the employer must comply with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy.

IN THE COMMISSION

Commissioner Pearl Lim heard the employer’s submission that it complied with its consultation obligations in the Multiple Sclerosis Society of WA (INC) Collective Agreement 2013, because it informed the financial analyst as soon as reasonably practicable after the decision was taken to make his role redundant.

Clause 11 of the Agreement states that where the organisation ‘has decided to take action that is likely to have a significant effect on an employee or make an employee redundant, the employee is entitled to be informed as soon as reasonably practicable after the decision has been made’.

The organisation must then discuss with the affected employee the likely effects of the action or redundancy and measures that may be taken to avoid or minimise a significant impact, including whether it would be reasonable in the circumstances for the person to be redeployed within the organisation.

Commissioner Lim found that the decision to review and restructure the team was made as early as June 2023, but management did not inform the financial analyst as an affected employee until 23 October 2023.

The decision to restructure the team was an action ‘likely to have a significant effect on an employee’, therefore it triggered the consultation requirements in the Agreement.

However, the evidence indicated that the financial analyst was not even notified of the review. The new CIO met with every executive, senior and middle manager to understand the team but he did not consult with the financial analyst, even when it came to understanding the financial analyst’s role, instead relying on advice from others.

This did not meet the Agreement’s requirements for consultation.

‘Consultation is not merely telling an employee that they have been made redundant several months after a decision has been made to restructure their team,’ Commissioner Lim said, therefore the dismissal was not a case of genuine redundancy.

The organisation did not offer the financial analyst any redeployment options, but Commissioner Lim accepted that it would not have been reasonable to redeploy him into the newly created Data Analyst role as it required expertise he did not have, and paid less than his previous position.

The financial analyst had completed the minimum employment period and was protected from unfair dismissal under s 382 of the Act.

After considering the relevant evidence and submissions of the parties, Commissioner Lim found that there were operational changes that meant the organisation no longer required the financial analyst’s role to be performed by anyone. But because the consultation requirements had not been met, the dismissal was unfair. She ordered compensation of $7,452.

WHAT IT MEANS FOR EMPLOYERS

The requirement to consult, especially on matters such as redundancy, gives employees the potential to affect the end outcome, which can include averting the need for their role to be made redundant or otherwise mitigating the effect of a redundancy. Employers should not ignore or disregard consultation requirements.

READ THE DECISION

Frederick Deon Du Preez v MSWA Limited [2024] FWC 1793 (9 July 2024)