What are the legal standards around communicating major workplace changes to your people?

If your organisation is introducing any major workplace changes that are likely to impact your workforce, chances are you will have a legal obligation to consult with all affected workers before making the change, under your relevant modern award or enterprise agreement.

If you ignore the obligation, you could face legal exposure for unfair dismissal claims, as well as a potential fine. For example, in August 2021, an aviation organisation was ordered to pay a $72,500 penalty for failing to consult air traffic controllers about roster changes, which was in breach of its enterprise agreement consultation obligation.

Consultation is not simply informing employees of a decision. Rather, it requires giving employees an opportunity to consider and influence a decision that has been proposed, especially if it would affect their employment in any way. 

What counts as major workplace changes?

Any change that will likely have a significant impact on more than one employee – on their job security or promotion opportunities, for example – will usually require consultation. However, it is now fairly accepted that one-off redundancies will not usually require consultation.

Whether a workplace change is ‘major’ is not determined simply by the workforce proportion that is affected. A change that has an adverse impact on a small number of senior or critical employees may be considered a major change, for example.

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Modern awards also require employers to consult about changes to regular rosters or ordinary hours of work. Under the Fair Work Act, obligations to consult also arise when an employer makes a decision that will have a significant effect on the status, pay or location of a parental leave employee’s pre-parental leave position.  

A dismissal on redundancy grounds will only be exempt from unfair dismissal laws if the employer complied with all its obligations under a modern award or EBA that required it to consult about the redundancy (provided the number of redundancies is, generally, greater than one).

How to maintain compliance

To give you a simple run down of the consultation process, it usually involves three stages: 

1) Informing employees about the change

 2) Giving employees the opportunity for input 

3) Considering this feedback before making any decisions 

The information needs to be provided to staff in writing and it should explain the nature of the change, the expected impact on employees and any other matters likely to affect the employees.  

You don’t have to provide confidential or commercially sensitive information, but you do have to recognise that employees are entitled to be represented by unions or other parties in the consultation process.

The opportunity for input is usually facilitated by face-to-face or online discussions. 

It’s important that you keep an open mind in these meetings. You might have a view as to what is likely to happen, but you need to afford employees a genuine opportunity to change your mind.

Importantly, consultation does not mean giving employees or unions a right to veto. It’s a means to ensure those employees who bear the brunt of the change have a genuine opportunity to raise any concerns they may have. Provided you take this feedback into account, you can proceed to implement the required change. 

For more information, refer to the consultation and dispute resolution clause set out in your award or registered agreement. This is usually found in Part 2 of an award. You can also use the Fair Work Ombudsman’s ‘Find my award’ tool to see which applies to you.

This article first appeared in the December/January 2021 edition of HRM magazine. The advice in this article is general in nature. Legal advice should be sought for your specific circumstances.

Charles Power is a Partner and Stefania Silvestro is a lawyer at Holding Redlich lawyers.