Failure to consult about subjective selection makes redundancy unfair
As most employers will be aware, an employee dismissed due to genuine redundancy cannot claim unfair dismissal. Under section 389 of the Fair Work Act 2009 (Cth), in determining whether a dismissal is a genuine redundancy the Fair Work Commission (FWC) is only required to consider whether:
- the job is no longer required due to operational changes
- there has been compliance with applicable consultation obligations and
- reasonable attempts have been made to redeploy.
The methods used by the employer to select employees for redundancy are not taken into account.
However, a recent FWC decision serves as a reminder that selection criteria may come under scrutiny if the employer can’t meet the genuine redundancy threshold, underscoring the importance of complying with any consultation obligations.
In Kumar v Fuji Xerox Australia Pty Ltd1 the employer took steps to reduce its headcount as a result of a downturn in business. A selection matrix was used to determine who would be made redundant in the first tranche of redundancies which included the following criteria:
- Values and behaviour.
- Productivity.
- Machines per day.
- Timekeeping.
- Workmanship.
- Technical ability.
Each employee was given a score out of 3 for each of the criteria. Mr Kumar, who was an experienced technician with over 20 years’ experience, scored what would normally be considered a high score (16 out of 18). However, due to the narrow bandwidth of the scoring, this was a low score in comparison to his colleagues and his employment was terminated on grounds of redundancy.
The FWC found that Mr Kumar’s termination was not a genuine redundancy due to the employer’s failure to consult with Mr Kumar and his trade union in accordance with the applicable enterprise agreement. This included a failure to consult with the union on the selection criteria that would be used.
The FWC then went on to consider if the dismissal was harsh, unjust or unreasonable. The FWC considered that the scoring system for the skills matrix was flawed due to the narrow bandwidth of the scores and criticised the employer for not giving the employee an opportunity to challenge the selection criteria or the score he was given under it, particularly given the subjectivity of the matrix.
Although Mr Kumar’s dismissal was found to be unfair due to the lack of consultation2, the decision noted that the FWC should not stand in the shoes of the employer and categorise or pass judgement on the skills, experience and work ethic of individual members of a workforce. This emphasises that, provided employers consult with employees about the basis of their selection for redundancy, the FWC will generally not look behind the employer’s reasons for the selection except in extreme cases of blatant unfairness.
1Kumar v Fuji Xerox Australia Pty Ltd [2018] FWC 3699
2The Respondent was ordered to pay Mr Kumar three weeks’ pay plus superannuation.
Contact
Jordon Lee
Lawyer
Geoff Benson
Lawyer
Harvey Duckett
Lawyer
Luke Denham
Lawyer
Jemima Whiteman
Lawyer
Bradley White
Lawyer
Sarah Khan
Lawyer
Marie Mitilineos
Lawyer
Gloria Tam
Lawyer
Sheldon Fu
Lawyer
Anna Cao
Lawyer
Claire Bourke
Lawyer
Chloe Taylor
Lawyer
Silvana Brcina
Lawyer
Daphne Schilizzi
Lawyer
Andrew Banks
Lawyer
Isabella Urso
Lawyer
Jessica Liu
Lawyer
Amelia Spratt
Lawyer
Luke Raams
Lawyer
Emma McDonald
Lawyer
Carl Ayers
Lawyer
Gus Hu
Lawyer
Rebecca Dodd
Lawyer
Gretel Burns
Lawyer
Rachel Bonic
Lawyer
Samantha Frost
Lawyer
Emma Bechaz
Lawyer
Matt Dolan
Lawyer
Luke Hefferan
Lawyer
Related practices
Employment & Workplace Relations You might be also interested in...
Employment & Workplace Relations | 12 Aug 2018
Near enough can sometimes be good enough
Investigating misconduct complaints in the workplace is never easy for any employer, but the recent decision of the Fair Work Commission in Natoli v Envision Employment Services [2018] FWC 4034 should provide some comfort: an investigation need not be perfect for an employer to be able to rely upon it in dismissing an errant employee.
Employment & Workplace Relations | 21 Aug 2018
Enterprise agreement approvals – how long is seven days?
Recent Fair Work Commission decisions have confirmed that employers must meet strict technical requirements before enterprise agreements will be approved.