Redundancy series No. 3 – Consultation

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In previous articles we have stepped through what a genuine redundancy is and what to be mindful of when planning a restructure. Once the planning is complete, next comes consultation with employees.

Section 389(1) of the Fair Work Act 2009 (Cth) requires that employers comply with any consultation provisions within any applicable award or enterprise agreement.

All modern awards and enterprise agreements include a consultation clause that impose obligations on employers to consult with employees in certain circumstances. While there may be some minor variations between instruments, the model consultation term contained within schedule 2.3 of the Fair Work Regulations 2009 (Cth) (Model Term), requires an employer to consult with employees where either:

  1. The employer has made a definite decision to introduce major change to:
    1. Production;
    2. Program;
    3. Organisation;
    4. Structure; or
    5. Technology

that is likely to have a significant effect on employees.

OR

  1. The Employer proposes to introduce a change to the regular roster or ordinary hour of work of employees.

Termination of employment, and the restructuring of jobs are just two of the matters that mean a decision to introduce major change is likely to have a significant impact on employees, which is why the Model Term is relevant to redundancies.

Process

The consultation process required by the Model Term is as follows:

  1. The employer must discuss the change with the relevant employees (including what the change is, the effect and what they are doing to mitigate the impacts);
  2. The employer must provide (in writing) all relevant information about the change;
  3. The employer must listen to what the employee(s) have to say;
  4. The employer must give genuine and prompt consideration to the matters raised by employees.

Despite the above, consultation as it is understood in an industrial context is not joint decision making. What is required is giving staff and their representative an opportunity, based on the sound knowledge of what is proposed, to provide feedback and raise matters they believe relevant for consideration by the decision maker.

The potential consequence of not following the required consultation process include orders to restrain any redundancies prior to termination, or orders for re-instatement and back pay on the basis that the redundancy was not genuine.

While the above strictly applies to award or enterprise agreement covered employees the above process is best practice for all redundancies including award free employees.

Stay tuned for our next article where we will look at a recent case relevant to redundancy.

Should you have any questions about consultation, or redundancies in general, please feel free to contact us.

Written by Nicole Dunn and Kate Gibson

 

Disclaimer: This publication has been provided for general guidance only and does not constitute professional legal advice. You should obtain professional legal advice before acting on information contained in this article.