Considering these three factors will help HR practitioners ensure they are meeting Fair Work requirements when offering a redeployment opportunity to an employee.

With employers under increasing pressure to do more with less, and with emerging technologies fundamentally reshaping the way work is done, the need for redundancies is becoming an uncomfortable reality for more and more businesses.

According to AHRI’s latest Australian Quarterly Work Outlook report, the number of organisations planning redundancies in the September quarter has risen to 27 per cent, up from 23 per cent in the June quarter.

Communicating these decisions to affected employees can be one of the most challenging aspects of HR’s job; not only do practitioners need to be the bearers of potentially upsetting news, but they also need to dodge legal pitfalls that could result in an unfair dismissal claim. 

According to the Fair Work Act, a person’s dismissal is a case of genuine redundancy if:

• the employer no longer requires the person’s job to be performed by anyone because of changes in operational requirements;
• the employer has complied with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy; and
• it would not have been reasonable for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

Therefore, if an employee can prove that there was an alternative role available that was not offered to them, or that a redeployment offer was not reasonable or fair, they may well have grounds to make an unfair dismissal claim and seek compensation.

“Quite often, employers trip up on that last hurdle of ‘reasonable redeployment’. They spend a lot of time trying to get the consultation right… and then they get to this last hurdle of redeployment, and they don’t put much effort into it,” says Molly Shanahan, Senior Associate at Snow Legal.

This disparity could be a result of confusion among employers as to what constitutes a “reasonable” redeployment offer.

“Whether redeployment is reasonable is based on the circumstances at the time of the dismissal,” she says. “And those circumstances might be a range of things – [for example], whether there is a job or position available, the qualifications required for that job, an employee’s skills and experience, the location and the remuneration.”

“It’s really important to consider an employee’s views in a meaningful way, because if the consultation is not meaningful and not genuine, there’s more risk.” – Molly Shanahan, Senior Associate at Snow Legal

3 characteristics of a reasonable redeployment offer

Given the extensive criteria used to determine whether a redeployment offer is reasonable, HR practitioners need to take a holistic approach to assessing the suitability of an alternative role.

According to Shanahan, a reasonable redeployment offer: 

1. Includes adequate consultation

Consultation with the affected employee prior to redundancy and redeployment is generally a legal requirement under awards, enterprise agreements and/or employment contracts. 

“Keeping people in the loop as much as you can is the best way to comply with consultation, so having lots of discussions and following up in writing,” says Shanahan.

“One of the key things is not to assume that an employee is going to reject a [redeployment] offer. If you have a role that’s completely different to their current role, you might think, ‘There’s no way they’re going to accept that,’ but they might want to – maybe they really love the company and want to stay in the business.”

This point was raised in a case heard last year by the Fair Work Commission (FWC), where an employer was criticised for its failure to adequately consult an employee prior to her redundancy. 

The employee in this case, a software engineer at a telecommunications company, was made redundant following a restructure driven by financial pressures. There were similar roles available in the company’s offshore technical support function in India, but it did not offer the employee a position in its Indian operations, assuming she wouldn’t accept it. 

However, the FWC found she was qualified for one of those roles, and pointed out that she wasn’t given a meaningful opportunity to express her interest in the overseas role, which she might have accepted. As a result, the FWC found the redundancy was not genuine and referred the employee’s unfair dismissal claim for further conciliation.

This outcome is a good reminder to avoid making assumptions about redeployments and ensure employees fully understand the opportunities open to them so they can make their own decisions.

“It’s really important that employers listen to what employees have to say as well,” says Shanahan. “Sometimes employees have good ideas, like, ‘Hey, what about that role that I saw come up the other day?’ It’s really important to consider an employee’s views in a meaningful way, because if the consultation is not meaningful and not genuine, there’s more risk.”

2. Must be fair and objective

When considering opportunities for redeployment, it’s imperative that HR practitioners do not let bias creep into their decision making.

This was made clear by an FWC ruling earlier this year involving a longtime employee of an Australian department store who was deemed unsuitable for redeployment after being made redundant.

Despite nearly a decade of service, the business did not adequately consider her for a part-time role as a beauty consultant, citing her inexperience with the brand and the “elevated clientele” she would be serving in the new role.

In its decision, the FWC rejected the notion that the employee would not have been capable of performing the role, and highlighted a number of flaws in the employer’s consultation process. 

Crucially, the employee was not informed that she was being considered for the role until the decision was made, and was unaware that an informal discussion with a member of the HR team was effectively an interview for the new position.

As a result, the employee has been given the green light to progress her unfair dismissal application.

Cases like this demonstrate the importance of fairness and objectivity when assessing an employee’s suitability for a given role. Particularly when there are multiple employees being made redundant and only limited opportunities for redeployments, HR should conduct a careful selection process just as they would if they were recruiting externally.

“[It’s about] going through the usual interview process and ultimately coming to a decision of who the best fit is,” says Shanahan. 

“That would be reasonable when you’re cutting, say, five people, and you’ve got two roles [available]. What wouldn’t be so reasonable is making someone redundant and then employing someone else from outside the business into a role which would have been suitable for that employee.”

“Quite often, employers trip up on that last hurdle of ‘reasonable redeployment’. They spend a lot of time trying to get the consultation right… and then they get to this last hurdle of redeployment, and they don’t put much effort into it.”  – Molly Shanahan, Senior Associate at Snow Legal

3. Considers the impact on an employee’s personal and professional life

Assessing the suitability of a redeployment offer requires employers to consider not only how the employee’s work duties could change, but also how the new role might impact their personal and family life.

The FWC has previously taken personal circumstances into account when deciding whether an employee’s rejection of a redeployment offer is grounds to reduce their redundancy pay. 

For instance, in May this year, the Commission refused an employer’s request to reduce a former truck operator’s redundancy pay despite the fact that he’d been offered an alternative role that he didn’t take up, since the new role would have required him to move from a three-weeks-on, two-weeks-off roster to a two-weeks-on, one-week-off roster. The Commission accepted his argument that the new roster would have increased travel burdens and forced him to spend more time away from home.

Thorough consultation with employees about their personal circumstances is therefore an essential step in considering how reasonable a redeployment offer is, says Shanahan.

“The more consultation you do with the employee, the more you’re going to [learn] about them, what they’re open to and what they’re not open to, and their living arrangements and personal circumstances,” she says. 

The FWC may even take into account an employee’s personal financial situation to determine whether an alternative role with lower pay would be suitable for them, she adds.

“They might be earning, say, $160k in their current job, and the new role is on $130k. That still might be a reasonable offer, because maybe the employee’s personal circumstances [mean] they don’t need the additional money.”

Nuanced considerations like this underscore the need for HR to look at the employee’s circumstances holistically and work collaboratively with them to arrive at  the best possible outcome.

Ensure your redundancy and redeployment processes stand up to scrutiny

In addition to factoring in the considerations above, Shanahan stresses the importance of thorough and compliant record-keeping throughout the redundancy and redeployment process.

“Even if there aren’t any roles [available], it’s still good to have records that show that you’ve still taken steps to look for them,” she says.

“Especially if you’re saying, ‘We do have this role, but we don’t think it’s suitable,’ or ‘You’re not going to meet the skills that we need for that role,’ then having the position descriptions available as evidence is quite important as well.”

Larger organisations will have additional considerations to keep in mind, she adds.

“The larger the business, the more roles there are likely to be, [which requires] more steps to try to find a role. So the larger the business, the more evidence you’re going to need to show which steps you took to consider redeployment.”

In conjunction with proper consultation, adequate record-keeping will help HR minimise fallout from a redundancy process and avoid the costly repercussions of an unfair dismissal claim.

All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.

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