After AHRI members put forward their questions about managing redeployment, we asked legal experts to respond. Here’s what they said. 

With redundancies on the rise, HR practitioners are increasingly having to navigate complex obligations around redeployment. 

As HRM highlighted in a recent article, common areas of confusion around redeployment include consultation requirements and whether a change in pay or location impacts the fairness of a redeployment offer. 

Mismanagement of areas like these could open employers up to unfair dismissal claims, so it’s imperative for HR practitioners to have an airtight understanding of their obligations.

During a recent AHRI webinar on the subject of the redundancies and redeployment processes, a number of AHRI members submitted follow-up questions to better understand the legal intricacies of the redeployment process. 

HRM put some of those questions to legal experts to help HR fill in the gaps. Here are their responses.

Question 1: What consultation obligations are there for a redeployment?

By Andrew Jewell, Principal at Jewell Hancock Employment Lawyers

Generally speaking, an employer’s redeployment obligations exist in an internal policy or otherwise in the unfair dismissal protections found in the Fair Work Act 2009 . 

If a policy exists then it must be followed by the company. If not, and if an employee is protected from unfair dismissal (not all employees are), then in the event of redundancy an employer must first genuinely consider redeployment to a suitable role within the business and related businesses.

By Amy Zhang, Team Leader and Executive Counsel at Harmers Workplace Lawyers

Organisations should not automatically assume that the position will not be considered appropriate or comparable by the employee or that it will be rejected by the employee. 

As a starting point, organisations should identify available roles that are suitable, irrespective of location, and have a dialogue with the employee about the role or roles. Failure to do so may mean that an organisation has not satisfied its obligations to consult and/or redeploy, and may consequently expose the organisation to claims of unfair dismissal, breach of consultation requirements under industrial instruments and potentially breach of any applicable redundancy policies. 

Question 2: If you can redeploy the employee within the business, do you still need to pay the redundancy for the position that has been made redundant even though they are continuing in a different role?

By Chris Hill, Principal at Onside Law 

If the employee is continuing to be employed within the same company, then there is no requirement to make a redundancy payment. This is because section 119(1) of the Fair Work Act 2009 – part of the National Employment Standards – provides that an employee is entitled to be paid redundancy pay if their “employment is terminated”. This means that the obligation to make redundancy payments to an employee kicks in when their employment is terminated and they leave the company. 

In my view, the main reason behind this is that redundancy pay is meant to provide some financial support for the employee while they search for new employment outside of the company.

“Remember that you can never contract ‘out’ of an obligation under the legislation.” – Adam Libbis, Managing Director, The Consulting Space

Question 3: How should geographical requirements factor into a fair redeployment process? For instance, if our organisation has multiple autonomous offices across different countries, each working on distinct projects, are we obligated to offer redeployment opportunities at these locations when a role becomes available? 

By Kathryn Dent, Partner, Workplace Relations and Safety at HWL Ebsworth Lawyers

Organisations looking to ensure redundancies are “genuine” under s.389 of the Fair Work Act 2009 for the purposes of avoiding unfair dismissal claims need to look both within the employing entity and “associated entities”.  

The Corporations Act 2001 (Cth) defines “associated entities”. Cases in the Fair Work Commission’s unfair dismissal jurisdiction have demonstrated that vacancies interstate and overseas may be positions that employers need to consider in terms of offering them to employees affected by redundancy.  

The most prudent approach is to assume that positions that exist outside the employing jurisdiction, which the affected employee has the skills and qualifications to perform, should be offered and the employee is then at liberty to accept or reject.  

It is often where employers make assumptions on behalf of employees in respect of vacant positions (and what these employees would accept) that they then are exposed to unfair dismissal, because the redundancy isn’t genuine since those “extra-territorial” positions would have amounted to reasonable redeployment.

Question 4: If an employee rejects an offer of work in a different location, could this be grounds to reduce their redundancy pay? 

By Amy Zhang, Team Leader and Executive Counsel at Harmers Workplace Lawyers

Possibly, but it would depend on the specific location as well as other factors. While the specific location would be one relevant consideration, the Commission would also look at all of the circumstances, including the impact on the affected employee, such as the extent of additional travel and any personal and familial commitments, responsibilities or exigencies, as well as other features of the offered role, such as whether the duties and conditions of employment are otherwise comparable. 

Assuming the offered role is the same and the only difference is location, generally, the further away the location and the longer the additional travel time, the more likely it is that the Commission would find that the offered role is not acceptable alternative employment and decline to reduce the amount of redundancy pay. 

For example, an offer of reemployment to another state would not ordinarily be found to be ‘acceptable alternative employment’, and redundancy pay would not ordinarily be reduced in such circumstances. 

Put another way, if the new location does not impose significant additional travel burden and does not cause other substantial impact having regard to the specific circumstances of the affected employee, then it is more likely that redundancy pay may be reduced by the Commission, assuming all other aspects of the role remain the same. What constitutes substantial impact and the extent of acceptable additional travel burden will depend on the specific circumstances of the case at hand.

Question 5: What happens if the organisation has positions available that the individual has the skills and capabilities to perform, but the position is only available on a temporary basis – does the temporary position need to be offered to the individual?

By Andrew Jewell, Principal at Jewell Hancock Employment Lawyers 

Generally speaking, the employer must offer any reasonable redeployment opportunities to the employee, even if they are less favourable (i.e. temporary, or on less pay) and it is a matter for the employee whether they accept the offer. 

An employer cannot require an employee to accept a less favourable role, but they should offer it.

Question 6: If an employee accepts a role at lower pay, do you have to pay any part redundancy or provision for loss of pay?

By Adam Libbis, Managing Director, The Consulting Space 

This is often referred to as a ‘partial redundancy’ or a ‘transfer to lower paid duties on redundancy’. In answering this question it’s important to refer back to the core definition of a redundancy.

Redundancy happens when an employer either:

• doesn’t need an employee’s job to be done by anyone, or
• becomes insolvent or bankrupt.

It’s also important to remember the requirement to follow any consultation obligations in the employees Industrial Instrument to ensure that the redundancy is considered ‘genuine’ or ‘bona fide’.

If you are in a situation where an employee’s role is being made redundant, and there is genuine agreement between both parties to transfer to a lower paid or classified role, then you should start by checking the relevant instrument and employment contract to see if there is a clause that relates to this scenario.

Most Modern Awards will have a clause that relates to ‘Transfer to lower paid duties on redundancy’ (e.g. Cl. 38.1 in the General Retail Industry Award). If your employee is award-covered then you should follow that consultation process in the award and then ensure the employee is provided with the necessary notice period (or payment in lieu of notice).  

There will also be a requirement to make a partial redundancy payment based on the gap between the ordinary rate of pay for their redundant role compared to the new role. The total payment will depend on how many years of service the employee has worked in that role.  Section 119 of the Fair Work Act contains the table for calculating this payment or you can access the termination and redundancy calculator on the fairwork.gov.au website.

“The further away the location and the longer the additional travel time, the more likely it is that the Commission would find that the offered role is not acceptable alternative employment.” – Amy Zhang, Team Leader and Executive Counsel at Harmers Workplace Lawyers

If your employee is award free, then any partial redundancy will need to be bilaterally agreed between both parties as a contractual change to conditions of service. The payment applicable will either be as per the contract or it will revert to the Fair Work Act (s. 119) if the contract is silent on redundancy pay.  

Remember that you can never contract ‘out’ of an obligation under the legislation. Redundancy is an entitlement included in the National Employment Standards, so any term in a contract that relates to redundancy would need to be at least as generous as the NES in terms of weeks paid per year of service.  

This information is based on the original role no longer being required and being made redundant. There may be some different approaches that do not require any redundancy payment where the conversation with your employee is focused on finding a role that is the right ‘fit’ for the contract-only covered employee in terms of skills and capability and the original role they were in will continue. Reaching genuine bi-lateral agreement on any transition remains critical. You should seek advice if this scenario presents to ensure all bases are covered.

If your employee is covered by an enterprise agreement (EA), you will need to follow the process as laid out in the agreement which will have been tailored to your organisation when the EA was drafted.

This sort of transition and transaction is not without risk, and you should seek advice before proceeding. You should be particularly aware of the ‘General Protections’ provisions in the Act which provide protection for employees from things like coercion, misrepresentation and adverse action, and assure yourself that there is genuine agreement and that your conduct as an employer has not potentially contravened any of these protections. 

Question 7: What is the best practice to manage psychosocial hazards and risks during a restructure/redeployment?

By Chris Hill, Principal at Onside Law 

I recommend employers check the relevant codes of practice published by Safe Work Australia as well as their relevant state/territory work health and safety regulator. 

As noted in the SafeWork NSW Code Of Practice for Managing Psychosocial Hazards at Work, an approved code of practice provides practical guidance on how to comply with WHS standards and manage risks. Further, in most cases, following an approved code of practice will help a WHS duty holder achieve compliance.

With this in mind, the SafeWork NSW code provides some relevant guidance to manage psychosocial hazards and risks during a restructure/redeployment, including consulting workers about the restructure/redeployment as early as possible, ensuring there is clarity and communication about any changes to roles and duties, and ensuring workers have appropriate re-training were relevant.

Many larger employers have engaged Employee Assistance Program (EAP) providers to support the mental health of their workforces. For some restructures or redeployments, it would be beneficial to ensure employees are aware of these services at the time of the announcement of the changes and consult with the affected employees. 

Further, for particularly significant restructures, I have seen employers arrange for counsellors from their EAP providers to be physically present onsite at that time and/or proactively contact affected employees for immediate psychological support (rather than waiting for employees to contact them).

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.

Learn more about legal best practice for managing the redeployment process by accessing AHRI’s free on-demand webinar, exclusive to AHRI members. Log into your member portal to access.