Despite signs that the economy is improving and businesses are ready to start hiring again, redundancies and forced resignations are still very common in the workplace; and with new workplace laws to abide by, employers must ensure they know their legal obligations and rights.
When it comes to redundancies, employers must provide a genuine reason for the redundancy. If an employee is dismissed due to their role becoming redundant, then as long as it is a ‘genuine’ redundancy under the Fair Work Act, the employee cannot bring an unfair dismissal claim.
What is required for a staff’s dismissal to be a ‘genuine’ redundancy?
- The staff member’s job must be no longer required to be performed by anyone because of changes to operational requirements
- The employer must have complied with any consultation requirements in an award or enterprise agreement
- It must not have been reasonable in the circumstances to redeploy the staff member within the company or within a related company.
Redeployment within the business
This is the bit that may trip some people up as while it is often usual to make some effort to see if a staff member can be placed elsewhere, even if not required to do so by an industrial agreement or award, it is now a requirement that you do so.
Also, if your business has more than one company you need to see if there are any suitable positions available within these other companies before concluding a redundancy is necessary.
When is it not reasonable to redeploy someone?
This is not yet clear as no one has yet challenged this. One issue in particular is the extent to which any positions you may be considering for the employee have to be identical to the one that has ceased to exist for redeployment to be reasonable.
Until this is made clearer, employers may have to take extra care in assessing the skills of the employee and whether they are capable of undertaking an alternative role. If the level of seniority and skills suggest the role could be comparable to the role that is ceasing to exist – making the employee an offer, even if the role is not identical, may be a wise move.
The risks of a forced resignation
Forced resignations, on the other hand, can be very tricky. Leaving aside the ethical issues of whether this is the proper course of action; making a poorly performing employee’s life uncomfortable so they resign and you avoid the trouble of complying with unfair dismissal requirements is never a wise move legally.
Unfair dismissals and forced resignations
Forcing a resignation on someone by making their life difficult can amount to a dismissal under the Fair Work Act. To claim an unfair dismissal, the employee has to show they were forced to resign because of the conduct or a course of conduct by their employer.
What if you as the employer did not intend for the employee to resign?
That is not relevant. The Fair Work Act is concerned with what the employee thinks, not the employer. So if the employee believes the employer’s actions were intended to force their resignation, then that is sufficient reason to lead to an allegation of unfair dismissal, even if that was not the employer’s intention.
What action should an employer then take?
To minimise the risk of an allegation of a forced resignation an employer should avoid the following conduct:
- Not following obligations under any agreements or company policies when dealing with a disciplinary issue
- Acting in a threatening/bullying manner or imposing unreasonable conditions on the employee under investigation including such things as:
– forcing the employee to transfer to a temporary role and not returning them to their previous role after the agreed period of time for the transfer has elapsed, without providing any explanation;
– requiring the employee to undergo counseling at his/her own expense before they will be allowed to participate in mediation with the employer concerning the disciplinary issues;
– the working conditions in the temporary role being poor such as being a considerably longer commute, the role being considerably less senior and no support provided to the employee in the temporary role;
– threatening to withdraw benefits such as a hire car.
Implications for employers
As has always been the case, if an employer wishes to dismiss a staff member they should always go through the proper processes not ‘disguise’ it as a redundancy or act in such a way so as to leave the employee little choice but to resign.
With the increased reach of the unfair dismissal laws since 1 July 2009, it is worthwhile remembering this common sense rule but also be aware that with a redundancy you must now first check whether redeployment is possible and with a forced resignation, that you do not act in such a way so as to lead the employee to believe they are being forced out.
– Kerry-Ann Aitken is a principal for Outsourcedlaw (www.outsourcedlaw.com.au)