Genuine redundancy: reasonableness of redeployment to overseas position
Oct 2013 |Roy v SNC-Lavalin Australia Pty Ltd [2013] FWC 7309
Introduction
In a decision handed down on 30 September 2013, the Fair Work Commission (FWC) confirmed that, in considering whether a person's dismissal is a genuine redundancy, FWC generally does not consider it reasonable for an employer to redeploy an otherwise redundant employee to an overseas location.
Background
Mr Brian Roy (Mr Roy) had worked for SNC-Lavalin Australia Pty Ltd (SNC) in the position of Senior Designer - Mechanical since February 2011. In March 2013, his position was made redundant.
Mr Roy filed an application for unfair dismissal remedy, arguing that his dismissal was not a case of genuine redundancy.
Section 389(2) of the Fair Work Act 2009 provides that a person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
a. the employer's enterprise; or
b. the enterprise of an associated entity of the employer.
Mr Roy argued that there were numerous positions for which he was qualified within SNC's associated international entities, and that SNC ought to have redeployed him to one of those international positions.
Decision
The FWC found that the dismissal was a case of genuine redundancy and dismissed the application for unfair dismissal remedy. In finding that the dismissal was a case of genuine redundancy, the FWC gave weight to the following considerations:
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An employer cannot be expected to redeploy an otherwise redundant employee to a more junior position at the expense of its incumbent. If the relevant position is not vacant, then it is not a position to which an otherwise redundant employee could reasonably be redeployed;
-
If there are no vacant positions available locally, then it would be appropriate for an employer to explore options for redeployment outside the local area. However, where an interstate redeployment is under consideration, the financial burden of funding relocation expenses would inform the reasonableness of the redeployment; and
- Generally, it will not be reasonable for an employer to redeploy an otherwise redundant employee to an overseas location. This is particularly so where there is no overriding central managerial control over a corporate group's human resource functions, and the employer does not have a facility to redeploy redundant employees to international locations.
Comment
The FWC applies an objective test in deciding whether it would have been reasonable in all the circumstances to redeploy an otherwise redundant employee. An individual employee's subjective expectations regarding redeployment within a corporate group will bear little, if any, weight in the FWC's considerations. Factors which will generally be considered by the FWC include:
1. Does the alternate position offer like terms and conditions?
2. Will service entitlements be preserved?
3. What is the distance between the alternate position and the employee's home?
4. What impact will the alternate position have on the employee's family responsibilities?
When considering redundancies, employers must also ensure that they comply with any consultation requirements imposed by a Modern Award or enterprise agreement.
