Offer to redeploy a redundant employee into another role

Pursuant to s 389 of the Fair Work Act 2009 (Cth) (the Act), an employee’s dismissal is not a case of 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 within an associated entity of the employer.

The question of what is reasonable in all the circumstances was considered in the case of Iryna Margolina v Jenny Craig Weight Loss Centres Pty Ltd [2011] FWA 5215. In this case Ms Margolina had a managerial role with a salary of $60,000.00 plus annual bonuses which resulted in her salary being in excess of $200,000.00. When Jenny Craig Weight Loss was acquired, her position was reviewed and it was decided that her position and employment responsibilities would be merged with another position. As a consequence of same, Ms Margolina was made redundant. Nevertheless, at the time of Ms Margolina’s redundancy, there were other lower paying clerical positions available within the organisation which had not been offered to Ms Margolina. As a result of Jenny Craig’s failure to redeploy Ms Margolina into the lower paying clerical positions, she filed an unfair dismissal claim on grounds that her redundancy was not a case of genuine redundancy due to the employer’s failure to consider redeployment.

It was held by Commissioner Ryan that it would have been reasonable in all the circumstances for Ms Margolina to be offered the lower paying clerical positions. Furthermore, Commissioner Ryan stated that the obligation on Jenny Craig was not an obligation of simply offering alternative employment in a similar role, as an employer cannot make a presumption that the employer knew the mind and financial circumstances of the employee. Accordingly, all roles should be offered to an employee, even if it is less senior with less pay.

Tips

• If you have employees who are employed pursuant to a Modern Award or Enterprise Agreement, you have an obligation to consult with your employee prior to making the employee redundant. Therefore, during the consultation you should be aware of any alternative employment positions, the skills which are required for those positions and question the redundant employee as to whether they have the skills, expertise and interest of working in an alternative, less senior position.
• Never make an assumption that an employee will not be interested in accepting a position which has a lower salary or lower skill set. As an employer, you have a positive obligation to consider redeploying the employee to another position within the organisation prior to making him or her redundant.

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