Dismissal found to be unfair where redeployment to less senior role not offered

The recent decision in Dr Petranel Ferrao v Peter MacCallum Cancer Institute [2016] FWC 4953 reinforces that a failure to fully explore redeployment opportunities, including to less senior roles, will undermine the genuineness of the redundancy and expose employers to unfair dismissal claims.

Dr Petranel Ferrao (Ferrao) had been employed with the Peter MacCallum Cancer Institute (Employer) in various roles and projects for over ten years. At the time of Ferrao’s dismissal, she was employed to lead a grant funded research project for a period of three years.

During the project, and particularly towards its conclusion, Ferrao was made aware that the Employer was de-prioritising her project and that her role would be made redundant. In implementing the redundancy, the Employer stated it had explored redeployment opportunities for Ferrao (as required to do), but that it had been unable to identify any. However, during the redeployment period, Ferrao had independently applied for two lower-level positions within the Employer’s organisation, but was unsuccessful because of her seniority.

The Fair Work Commission (FWC) was required to determine whether Ferrao had been dismissed unfairly, or otherwise on the basis of a genuine redundancy. The ‘genuineness’ of the redundancy in these circumstances depended largely on the Employer satisfying its obligation to explore redeployment.

The FWC concluded that Ferrao’s dismissal was unfair because, in the circumstances, redeployment was possible. The FWC noted that Ferrao’s experience and high skill level would have been transferrable to other roles, and the failure to redeploy her demonstrated a ‘lack of real efforts to achieve redeployment’.

Importantly, the FWC confirmed that where an employer advertises an internal position and subjects an employee to a competitive selection process, rather than redeploying the employee to that position, the employer may not be able to demonstrate the ‘genuineness’ of the redundancy to defend an unfair dismissal claim. It further confirmed that when considering redeployment (rather than a competitive selection process) an employee’s seniority should not be an obstacle.

Ferrao was awarded 26 weeks’ compensation (less the severance payment of 20 weeks that Ferrao had already received, and reduced by a further 10% because she applied for an additional grant without authorisation).

Employers take note: while a position may be redundant for genuine operational reasons, it may not be a ‘genuine redundancy’ (for the purpose of defending an unfair dismissal claim) in circumstances where impacted employees are overlooked for redeployment.


Karl Rozenbergs

Karl Rozenbergs

Partner & Co-Lead, Health & Community

Employment lawyer Karl Rozenbergs advises clients in adverse action claims, on negotiating enterprise agreements and much more.

Alexandra Lane

Alexandra is a commercial litigator with a broad practice in commercial disputes and insolvency matters.

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