Redeployment on redundancy: employer obligations clarified

The Fair Work Commission (FWC) has recently provided some useful guidance on when it will not be “reasonable in all the circumstances” to redeploy a worker from a redundant position to another available position within the organisation for the purposes of the “genuine redundancy” exclusion from unfair dismissal claims. 

It has also demonstrated for the first time that it is prepared to order applicants to provide security to satisfy potential cost orders in appropriate cases.

First instance decision
In Velasquez v Cabrini Health Ltd [2017] FWC 5965, a Grade 3 social worker claimed his dismissal was not a genuine redundancy because his employer did not redeploy him into another available Grade 1 position for which he was clearly qualified.

The employer refused to redeploy the social worker because:

• he was effectively overqualified for the role he had indicated he would not accept direction as a Grade 1 social worker was required to do and expected the employer to continue to utilise his Grade 3 skills
• there were poor relationships between the social worker and the manager to whom he would report if redeployed and between the social worker and other social workers in the relevant team, with a high risk of future disruption.

Prior cases have typically relied on the following confined principles in assessing whether redeployment was reasonable in all the circumstances:

• whether there is a job, position or other work into which the person could have been redeployed
• the nature of any available job, position or other work
• the qualifications and skills required to perform the job, position or other work
• the person’s skills, qualifications and experience
• the location of the job, position or other work
• the remuneration which attaches to the job position or other work.

In finding there was a genuine redundancy, Deputy President Gostencnik accepted that “fit” was also a relevant consideration and that employers could take into account “ the likely impact of redeploying a person into a job, position or other work on the cohesiveness of a work group and its efficiency and productivity because of the relationship that the person has, or has had, with prospective co-workers or supervisors
” in determining whether redeployment was reasonable in all the circumstances.

In this case, the Deputy President placed significant weight on “the serious level of distrust and lack of respect the [social worker] apparently had for [the manager]”. It was not a mere personality clash as the social worker had tried to characterise it.

Appeal
The social worker appealed Deputy President Gostencnik’s decision and the employer sought to have the social worker pay security to satisfy a potential costs order against him in Velasquez v Cabrini Health Ltd [2018] FWCFB 888. In granting the first order for security for costs that the Fair Work Commission has ever made, the Full Bench effectively endorsed the first instance decision when it found that:

• the appeal had little prospects of success, particularly given the failure by the social worker to identify any error of fact or law (let alone significant error of fact) in the decision; and]
• there was merit in the submission that the social worker was pursuing the appeal against the employer vexatiously.
  

The applicant discontinued the appeal when he was unable to raise the required security.

Holding Redlich is pleased to have achieved success for Cabrini Health at each step of the process.

Lessons for employers

Employers can take into account a broad range of considerations when assessing whether it is reasonable in all of the circumstances to redeploy, including how well the employee will fit in the new team. Compelling reasons are required to avoid redeployment.

Where the applicant has already had their “day in court” and appeals the matter without adequate legal basis, it may be prudent to ensure they can pay your legal costs if they lose as expected. Seeking security may avoid the need to deal with the appeal.

Authors: Ben Marshall & Lauren Drummond


Contacts:

Melbourne

Benjamin Marshall, Partner
T: +61 3 9321 9864
E: ben.marshall@holdingredlich.com

Charles Power, Partner
T: +61 3 9321 9942
E: charles.power@holdingredlich.com

Sydney

Stephen Trew, Managing Partner, Sydney
T: +61 2 8083 0439
E: stephen.trew@holdingredlich.com

Michael Selinger, Partner
T: +61 2 8083 0430
E: michael.selinger@holdingredlich.com

Brisbane

Rachel Drew, Partner
T: +61 7 3135 0617
E: rachel.drew@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

Published by:

Ben Marshall

Lauren Drummond

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