Failure to follow consultation requirements leads to compensation payment

Failure to follow consultation requirements leads to compensation payment

The Fair Work Commission has rejected an employer’s claim that an employee’s separation was due to a genuine redundancy, although acknowledging that the employee would likely have been made redundant shortly after. The case highlights the need for employers without in-house employment resources to seek specialist advice when managing employees.

The employee, ‘BR’, was employed by Starlluf Cranes Pty Ltd (Starlluf) in various roles after initially commencing employment as a casual on 16 December 2013. He converted to full-time employment on 13 January 2014, where he remained until his separation on 3 December 2021.

The trigger for his separation appears to have been his lodgement of a workers’ compensation claim after he incurred an injury to his ankle. On 21 May 2021, he supplied a certificate of incapacity indicating he was able to work 6 hours per day, 5 days per week, on light office-based duties.

These arrangements remained in place until 20 September 2021, when Starlluf’s Service Manager advised him that workshop activities had declined and that he therefore would be only required to work Wednesdays to Fridays, with the other two days to be taken as annual leave.

BR responded on the same day, advising his manager that he had received full clearance to return to unrestricted pre-injury duties, including significant fieldwork. Nevertheless, he was placed on a week’s annual leave, which caused some tension between the two. Over the next week, a series of emails between the two added to the existing tension.

On 7 October 2021, Starlluf issued him with a new employment contract stating he had a new position as a ‘Crane Technician – Mechanical’. On 18 October 2021, he attended a meeting with a company director, during which BR claimed he was told his position was being made redundant as sales had declined due to the pandemic.

He immediately wrote to his employer claiming entitlement to redundancy as per the prevailing Modern Award. Failing to get a response, he again wrote on 25 October 2021, seeking his entitlements. The following day, his employer emailed him requesting him to work out his five-week notice period. On 1 November 2021, his employer advised him he was being made redundant with a separation date of 4 December 2021.

Extraordinarily, Starlluf then wrote to BR on 15 November 2021, claiming they had work available, sought to rescind their redundancy decision, and offered him a new contract.

BR did not sign the contract and, on 2 December 2021, informed the company he was not accepting their offer of redeployment and would cease work the following day.

As Commissioner Alana Matheson noted in her determination, it is a long established principle that an employer cannot retract a notice of termination without the employee’s consent. Consequently, BR’s rejection of the new contract resulted in him being dismissed.

Commissioner Matheson accepted that it was likely that the employee was to be made genuinely redundant; however, consultation, as required by the Award, did not occur. As the Commissioner noted,

I accept the Applicant’s account of events that, during the meeting on 18 October 2021, he was verbally advised of the termination of his employment by reason of redundancy and was told at that time he would be paid notice in lieu … the Respondent should have given the Applicant notice of the change and the expected effect of the changes upon him … That the dismissal was conducted in breach of the consultation provision of the Award weighs in favour of a finding that the dismissal was harsh, unjust or unreasonable”.

Commissioner Matheson determined that he was entitled to 11 weeks’ pay, amounting to a sum of $19,646.00.

BR v Starlluf Cranes Pty Ltd (U2021/12075) 9 August 2022

For queries about redundancy, consultation requirements, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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