- Talia Firth, Senior Associate, Ashurst
ELM: In our upcoming How to reduce risk during the dismissals & terminations process workshop you’re involved in Talia, the Ashurst team are specifically covering a topic on the risks that can arise from redundancies and workplace restructures. What would be your top recommendations for what an employer should consider when making these decisions?
Talia: My top two tips would be to carefully consider your obligations before making any decisions which may lead to redundancies and to properly document your decisions and actions in relation to workplace restructures. You need to be able to identify the relevant decision maker/s and those individuals should be able to clearly articulate the reasons for their decisions. You will also need to be able to show that the employer has complied with its obligations in relation to consultation and redeployment.
ELM: Redeploying employees is an obvious consideration for workplaces when restructuring is involved; in brief, what can impact the decision to redeploy someone and how can redeployment be done effectively in your opinion?
Talia: It is important to have a process for considering whether employees whose positions are redundant can be redeployed within the employer’s business or within an associated entity. The employer should consult with employees about the redeployment process.
Whether it is reasonable to redeploy an employee will depend on what vacancies exist and whether the employee has the appropriate skills, experience and qualifications for an available position or can obtain the necessary skills through reasonable retraining. The location of the position and the remuneration which is offered are also relevant considerations. For example, if the employee would be required to relocate to take on an alternative role, then it will be relevant to consider the costs of relocation and whether or not the employee is willing to relocate.
When considering whether it would be reasonable to redeploy an employee to an associated entity, it is relevant to consider the degree of managerial integration between the associated entities.
Employers should consider providing all affected employees with a questionnaire to understand what redeployment options each employee is willing to consider and to ensure that the employer has all relevant information about each employee’s skills, qualifications and experience – including skills and experience the employee obtained before joining the employer. The employer should then carefully consider whether there are vacancies for which the employee is suitable (or could be trained to perform) and which match the employee’s preferences.
ELM: Are there any case examples you can highlight related to the above; what can be learnt from these cases?
Talia: The leading case on redeployment is still Ulan Coal Mines Limited v A Honeysett and Ors  FWAFB 7578. That’s a case that I was involved in back in 2010 that involved ten unfair dismissal applications arising from a restructure at the Ulan Coal Mine near Mudgee. In that case the Full Bench stressed that it is an essential part of the concept of redeployment that a redundant employee be placed in another job, as opposed to having to compete with other applicants for the position. The Full Bench also listed the factors that I mentioned previously as being relevant to considering whether redeployment would be reasonable in all the circumstances.
Another relevant decision is the case of Paul Williams & Ors v Staples Australia Pty Ltd  FWC 607 which was handed down earlier this year. In that case Staples Australia was ordered to reinstate four employees after the Fair Work Commission found that the employees’ dismissals were not genuine redundancies within the meaning of s389 of the Fair Work Act 2009 (Cth) and that the employees had been unfairly dismissed.
In that case Commissioner Cambridge concluded that the employer’s approach to consultation was “unduly hasty and largely tokenistic” and did not comply with the employer’s obligations under its enterprise agreement. In particular the process whereby employees were selected for redundancy one day after being told of the restructure did not provide sufficient opportunity for consultation. The Commissioner also found that it would have been reasonable in all the circumstances for the Applicants to have been redeployed within the employer’s enterprise.
The Staples case highlights the importance of careful planning and following a thorough and defensible process for implementing restructures.
We will discuss some other relevant cases during the workshop as well.
ELM: You’ll be going through some post-employment processes and risks in your June presentation, especially those related to reasonable notice, restraints and termination clauses – where have you seen employers had issues here, and what do you often advise to avoid such issues?
Talia: Issues often arise when employers try to adopt a “one size fits all” solution for all of their employees.
Notice periods should be appropriate to the seniority of the role and should be adjusted as necessary when employees move up through the organisation. Otherwise there is a risk that an employee will argue that a court should imply a longer notice period into their contract of employment.
Similarly, if an onerous restraint of trade clause is included in a contract and the restraint is not reasonably necessary to protect confidential information and trade secrets of the employer, there is a risk that the restraint will be struck out or read down, depending on the jurisdiction.
When it comes to termination of employment, employers should ensure that their contracts of employment are appropriately drafted and updated – and of course, they should ensure that they comply with any obligations under any applicable award, enterprise agreement or legislation.
ELM: We’re always grateful for your involvement at our conferences and events Talia; you’re an extremely engaging and thorough presenter. Having done these often, what do you hope attendees gain from your presentations, and specifically for this June workshop, is there anything you’d highlight for why this workshop would be beneficial for them?
Talia: Thanks! I certainly encourage people to come along to the June workshop.
Redundancy, restructuring and redeployment are littered with legal landmines, such as unfair dismissal (including whether it is a “genuine redundancy”), adverse action or other claims for breach of a contract or industrial instruments.
In the workshop we will consider the best ways that employers can protect themselves against legal claims and, just as importantly, how to treat employees fairly and reduce the risks of adverse publicity or industrial unrest.
Change can be very unsettling and uncomfortable, particularly when it involves people’s livelihoods. With the right process in place, employers can implement any workplace changes as smoothly as possible.
About Talia Firth:
Talia works with private sector and government clients within Ashurst to resolve their employment and industrial relations issues through strategic advice, dispute resolution and workplace training. Talia advises clients in relation to industrial relations strategy and planning, enterprise bargaining, restructuring and industrial disputes. She assists clients to manage employment issues including workplace investigations, performance management and termination of employment. She is regularly involved in the conduct of court and tribunal proceedings.
Talia and the Ashurst employment team will be one of four speakers per location at the upcoming How to reduce risk during the dismissals & terminations process workshop in June.