Compliantly proceed with a redundancy

By Amanda Curatore

Welcome to part four in our series of articles on how to compliantly proceed with a redundancy. In this article, we will be addressing the next step in the process; redeployment.

Now that you have established that there is a change to your business’s operational requirements, and you’ve commenced the consultation process, there is just one last step – redeployment – considering if there is a suitable position in your business which your employee could be reassigned to. Redeployment opportunities should be explored during the consultation process. Here is everything you need to know…

What exactly is redeployment?

Redeployment is when you place an employee into an alternative position because their current position has become redundant. Even where there is a valid change to your business’s operational requirements, and you have conducted a consultation process, a redundancy would not be considered genuine if, in all of the circumstances, there’s a reasonable opportunity for the employee to be redeployed within your enterprise or the enterprise of one of your associated entities.

Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. Several factors are relevant when considering the concept of ‘reasonableness’ including:

whether a vacant position exists;
the skills, qualifications, experience and knowledge required to perform the job; and
the employee’s skills, qualifications, experience and knowledge.

Position vacant

If an employer has other positions available, even at a lower level, that the redundant employee has the skills to perform, the employer should not presume that the employee will refuse the position. In a 2011 Fair Work Commission case, an employer was found not to have engaged in a genuine redundancy because it failed to offer its redundant employee a position, she had the skill set to perform, albeit the position carried a lower salary.

The employer in this case genuinely thought the employee would not accept a position which carried a lower salary when in fact, the Commission, when it explored all of the evidence in the circumstance, found the employee was prepared to take on the lower paid job because it meant it came with less responsibility and she was able to use her extra spare time to spend with her family. This highlights the importance of an employer never presuming an employee’s intention in accepting a lower paid job or a job located in a different location.

Skills, Qualifications, Experience & Knowledge

When determining whether the job is suitable, an employer must not only consider the employee’s current skills and competence required to perform the role but whether such skills and competencies could be developed within a reasonable period of time through the provision of training, mentoring or other support.

Associated Entities

It is also important to remember that an employer is not only required to assess whether there are any vacancies an employee can be redeployed into in the business but to also assess whether there are any vacancies in an associated entity of the employer. An entity (the associate) may be an associated entity of another entity (the principal) in the following circumstances:

the associate and principal are related bodies corporate;
the principal controls the associate;
the associate controls the principal and the operations, resources or affairs of the principal are material to the associate;
the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate;
the principal has a qualifying investment in the associate, has significant influence over the principal and the interest is material to the principal, or;
a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.

In these circumstances, the word control means where an entity makes decisions that determine the financial and operating policies of the other entity.

Where an employee is redeployed into a position in your associated entity, this is defined as a transfer of employment. Where this happens, employees transferring from your entity into a position with your associated entity will have all their accrued leave entitlements recognised and transferred as well as their continuity of service.

The reality of the situation in the present environment is that due to the economic and social impact caused by the coronavirus, your business will need to make operational decisions to reduce costs and increase efficiency. This is likely to mean that due to the redundancy being a cost-cutting exercise, redeployment will not be available in the circumstances. Nevertheless, you must proceed with the review into any opportunities of reasonable redeployment and offer this to the redundant employee if appropriate.

You have now determined that your business is undergoing a change to its operational needs, have consulted with individuals impacted and have considered any opportunities for reasonable redeployment. You have complied with all of your obligations with completing a genuine redundancy. Now all that is left to do is advise your employee of your decision.

Keep an eye out for our last article on calculating redundancy entitlements.

HR Assured is an end-to-end outsourced HR solution for SMEs combining unlimited expert workplace relations advice, award-winning HRA Cloud Software, auditing and our Advice Promise. Our clients reduce the time they spend on HR by up to 90%! That’s more time for them to run their business and get on with the things that matter.

Disclaimer: Businesses operating as an unincorporated entity in Western Australia should seek specific advice regarding redundancy obligations.

Amanda Curatore is a qualified senior workplace relations consultant at FCB Group and HR Assured. Amanda is highly experienced in providing workplace relations advice and assistance to clients in a wide range of matters including employment contracts, modern award interpretation, managing performance, bullying and harassment, terminations and managing risk.

How to compliantly proceed with a redundancy – part 4: redeployment

What exactly is redeployment?

Position vacant

Skills, Qualifications, Experience & Knowledge

Associated Entities

Other articles in the series:

Backpay obligations for enterprise agreements: the FWC has decided

Fixed and maximum-term contracts are changing. Here’s what you need to know

Small business, big mistake: FWC rules on procedurally unfair terminations

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