Recent Precedent 2010 - Issue 3

Posted on 25 April 2010

“Not Redundant” - Unfair Dismissals Allowed to Proceed

Genuine Redunancy - Exemption to Unfair Dismissal

An exemption to Unfair Dismissal exists if an employee’s position was terminated due to genuine “redundancy”. That is, if their job is no longer required to be done by anyone, the employer consulted with them and their were no other positions available in that, or any related, business. As the following case shows, this is a delicate issue. Clumsy execution can cause great embarrassment and loss of money, reputation and morale.

New Employees Replaced Old Ones

10 employees terminated by Ulan Coal Mines Ltd due to so-called “redundancy” have been successful in having their claims heard by Fair Work Australia.

Ulan said it had terminated the 10 experienced, but non-trade qualified, employees as part of a restructure that included employing only tradequalified mineworkers.

The Union claimed the employees were not exempt from Unfair Dismissal as the redundancies were not “genuine” as the new employees had replaced the old ones. Fair Work Australia accepted the employee’s claim and found:

- the jobs were still being done by others, and the issue of “trade” qualification was irrelevant. There was no “genuine” redundancy;

- Ulan had not properly consulted with each of the employees prior to terminating their employment.

What to Do

1. Obtain legal advice as soon as you contemplate employment changes

2. Ensure adequate documentation of all communications with employees, including obtaining confirmation of consultation from employees

3. Finalise arrangements in a Deed of Release

Our Business Health Check is a great introduction as to the ways in which we can help protect you against avoidable claims and disputes. If you would like to know how contact us to arrange at free BHC today on 1300 306 335 or