In an important decision the High Court has found that a mining company unfairly dismissed employees who were made redundant in a downturn and who could have undertaken work that was being performed by contractors.
The Facts
A mine restructured its operations in a downturn which resulted in 47 redundancies, but it continued to use contractors to perform similar work.
The employees successfully applied to the Fair Work Commission for unfair dismissal.
The Fair Work Act 2009 provides that a redundancy will not be genuine if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.
The Fair Work Commission found that the redundancies were not ‘genuine’ because the mining company could have redeployed the workers to perform similar work that was being performed by contractors.
The decision was appealed by the employer, ultimately to the High Court.
The Decision
The High Court dismissed the employer’s appeal, finding that the employer’s obligation for redeployment is broad and can include the employer considering changing how it uses its workforce, and assessing if there is a demand for work that could be performed by the redundant employee.
In this situation redeployment to the work performed by the contractors was reasonable to consider where the mine did not have a continuing obligation to retain the contractors, and where their agreements were to end soon after the employees were made redundant.
Implications
The case is important as it emphasises the breadth of an employer’s obligation to consider redeployment opportunities for redundant employees. Employers should not only look at available positions but also consider if changes to their workforce composition could make a redeployment opportunity available, such as where the employer is using short-term contractors for similar work.
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