Consultation Provisions for Modern Award Covered Employees
It will not be a genuine redundancy if an employer does not comply with any relevant obligation to consult about the redundancy in a modern award.
Section 389 of the Fair Work Act requires consulting with the affected employees before terminating employment due to redundancy.
Failing to consult with employees about redundancy may result in the Fair Work Commission finding that it was not genuine and ordering an additional amount to be paid to the relevant employee. Some exceptions are based on the circumstances of the business, such as the company going into liquidation or receivership or events such as floods and fires stopping the busier from operating.
Consultation must be genuine and not superficial
Consultations should be meaningful and engaged before making an irreversible termination decision.
Consultations should be of genuine value in enabling points of view to be put forward, which can be met by modifying a scheme and sometimes even by withdrawing it.
Case examples
Evidence of meetings and emails exchanged regarding redundancy
Patti v Vincent Chrisp & Partners P/L t/a Vincent Chrisp Architects [2012] FWA 8677 (Hamilton DP, 11 October 2012).
The employer experienced a reduction in business and consequently made several positions redundant. The employer met with the affected employees to discuss the need for redundancies and sent letters explaining the need for redundancies. The employee sought further information regarding the redundancy and requested recognition of an additional year of service. The employer provided all the extra information sought by the employee.
It was found that the employer met the consultation obligations.
Evidence in writing of changes, a meeting called – employee refused to cooperate
Lindsay v Department of Finance and Deregulation [2011] FWA 4078 (Williams C, 14 July 2011).
The employer notified the employees of proposed redundancies in writing and then met with them to discuss the changes. The meeting with the one employee was brief due to her hostility towards the employer. It was held that consultation with the employee was truncated due to her attitude and actions rather than by any refusal by the employer to consult. The employer met the consultation obligations.
Note that non-award-covered employees, such as managers on an annual salary, do not have the benefit of the consultation process.
