EMPLOYER BEWARE: Redundancy unfair as employee missed out on job keeper

by | Aug 25, 2020 | Business, Articles

Summary:

  • The Fair Work Commission (FWC) found that an employee who was made redundant was unfair and a non-genuine redundancy because of the employer’s failure to consult.
  • The employee missed out on receiving the Job Keeper wage subsidy that would have otherwise kept her employed longer during Covid-19.
  • The employer was ordered to pay the employee compensation in the amount to what she would have otherwise received in wages based on the circumstances.

Background of the Case:

Ms Freebairn was employed as a part time (3 days per week) administrative assistant at TJL Business Advisors and Accountants (TJL). 

As a result of Covid-19, TJL suffered a significant downturn in business. To address the financial issues faced by the business, TJL held two ‘town-hall’ meetings with all staff.  After assessing the financial viability of the business, TJL made the decision to reduce some of the administrative staff hours and make some employees redundant.

In a private meeting, Ms Freebairn was advised by TJL that she would be better off overall receiving the Job Seeker payment. In the same meeting, Ms Freebairn was made redundant without the discussion of redeployment or options to reduce hours. It was later discovered that TJL would have considered reducing Ms Freebairn’s hours, and Ms Freebairn would have accepted reduced hours if it was offered.

The outcome:

  • The FWC said that had proper consultation taken place, the outcome would have been that Ms Freebairn would have been on reduced hours whilst receiving Job Keeper.
  • Because TJL failed to meet proper consultation obligations, Ms Freebairn’s redundancy was not a genuine redundancy and TJL was ordered that pay compensation to Ms Freebairn.

Key take-aways:

  • A genuine redundancy is when an employer:
  1. no longer requires the role to be performed;
  2. has notified the employee and complied with consultation obligations; and
  3. has made reasonable efforts to redeploy the employee.
  • Always refer to the applicable Fair Work Award to ensure proper and genuine consultation is conducted with employees who may be affected by any decision that would alter their employment in any way.
  • To mitigate an adverse decision on an impacted employee; employers should consider redeployment within the business (or related entities). This includes redeploying an employee to a role that could be lower in remuneration and/or reduced hours.

 

Please note the above is intended to be commentary and general information. Commentary and general information should not be relied upon and substituted as legal advice. Formal legal advice should always be obtained.

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