Job no longer required due to changes in operational requirements

A job involves 'a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee'.[1]

Where there has been a reorganisation or redistribution of duties, the question is whether the employee has 'any duties left to discharge'.[2] If there is no longer any function or duty to be performed by that person, his or her position becomes redundant.[3]

An employee may still be genuinely made redundant when there are aspects of the employee's duties still being performed by other employees.[4]

The test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form.[5]

The reference to 'a job no longer being performed by anyone' refers to anyone employed by the business.[6] Therefore, the position can be performed by independent contractors supplying services.[7]

It should be noted that it is the employee's 'job' that is no longer required to be performed, rather than the employee's 'duties'.[8]

The Fair Work Act does not define the term 'operational requirements'. It is a broad term that permits consideration of many matters including:

• the past and present performance of the business
• the state of the market in which the business operates
• steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively, and
• the application of good management to the business.[9]

Some examples of changes in operational requirements are:

• a machine is now available to do the job performed by the employee
• a downturn in trade has reduced the number of employees required
• the employer restructures their business to improve efficiency and redistributes the tasks done by a particular person between several other employees, therefore the person's job no longer exists[10]
• a site or business closure
• the completion of a project, or
• outsourcing.

The onus is on the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements.[11]

Job was no longer performed by anyone because of changes in the operational requirements

Downturn in business

UES (Int'l) Pty Ltd v Harvey [2012] FWAFB 5241 (Acton SDP, Kaufman SDP, Bissett C, 14 August 2012), [(2012) 215 IR 263].

A warehouse manager's position was selected to be made redundant. There was a decline in business and therefore the employer no longer required the job to be performed by anyone because of changes in the operational requirements of the enterprise.

Note: Due to the employer's failure to consult, it was found not to be a genuine redundancy.

Restructure – reduction in number of positions

Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 (Hamberger SDP, 19 February 2010).

The employer reduced its number of supervisors from 4 to 3. It was held that it can still be a 'genuine redundancy' if the duties of a redundant job are still required to be performed, but are redistributed to other positions.

Restructure – reduction in numbers – downturn in business

Markac v CSR Limited [2010] FWA 4548 (Hamilton DP, 2 July 2010).

The employer required fewer process worker positions due to the projected future needs of the firm. The employer ranked its employees based on a skills assessment. The employee scored poorly in a number of areas in the skills assessment and was consequently made redundant. It was held that it was a genuine redundancy.

Long-term employee – only person made redundant following the automation and rationalisation of plant

Solari v RLA Polymers Pty Ltd [2010] FWA 5676 (Sams DP, 30 July 2010).

The employer closed one of its 2 plants. The employee was the only person to be made redundant. It was found that while some of the employee's duties still existed, the job was no longer required. This was found to be a genuine redundancy.

Changes in operational requirements following a direction from client

Deeney & Others v Patrick Projects Pty Ltd [2019] FWC 1772 (Bull DP, 19 March 2019).

Four applicants contended that their terminations, as full-time permanent employees, were not genuine redundancies and as a result they believed they had been unfairly dismissed. The applicants were initially employed as casual employees in July 2012. They were all appointed to full-time permanent positions in August 2012. On 19 February 2014 the respondent wrote to 43 employees, including each of the applicants, notifying them of their redundancy and advising that their employment would come to an end on 20 March 2014. The respondent offered each applicant employment as a casual employee. This offer of casual employment was not taken up by any of the applicants. The respondent also provided the applicants with a list of available positions at Asciano, an associated entity. None of the applicants expressed any interest in the available positions.

The Fair Work Commission was satisfied that the respondent no longer required the applicants’ jobs to be performed by anyone due to changes in the operational requirements of the respondent’s enterprise following a direction from its client. The Commission found that the fact that casual opportunities remained did not detract from the need for the respondent to reduce the full-time permanent workforce. The Commission was satisfied that the consultation requirements set out in s.389(1)(b) of the Fair Work Act had been met, and that it was not reasonable in all the circumstances for the applicants to be redeployed within the respondent’s enterprise or an associated entity. The Commission was satisfied that the applicants’ redundancies were genuine redundancies. The Commission held that on this basis the applications cannot succeed and must be dismissed.

Termination was found NOT to be a case of genuine redundancy – job performed by someone – operational requirements of the employer's enterprise not met

Employee replaced with more qualified person

McIlwraith v Toowong Mistubishi Pty Ltd [2012] FWA 9662 (Cribb C, 22 November 2012).

The employee's position as a Financial Controller was made redundant. The employer then hired a qualified accountant to a position titled Dealership Accountant. The duties identified in the job advertisement for the new position were identical to those of the position made redundant. The employer placed considerable emphasis on the requirement of a tertiary qualification in accounting; however the job advertisement did not specify this requirement. It was found that this was not a case of genuine redundancy.

Employee's duties given to another employee

Rosenfeld v United Petroleum Pty Ltd T/A United Petroleum [2012] FWA 2445 (Ryan C, 22 March 2012).

The applicant was dismissed following a restructure of the business. The employer then assigned all of the applicant's former duties to another employee (the second employee). Most of the duties previously performed by the second employee were then given to a third, newly hired, employee. The employer argued that having the second employee perform all of the applicant's former duties was consistent with the concept of redistribution and was therefore a genuine redundancy.. It was held that it was not a case where an applicant's duties were distributed among other employees as the applicant's job still existed after his dismissal this was not a case of genuine redundancy.

Consulting firm hired to take over employee's role

Miller v Central Gippsland Water Authority [1997] FCA 1081 (2 October 1997), [(1997) 76 IR 186].

The employee was the General Manager of the human resources department. The employer hired consultants to conduct a review of its operations. The employer retained the consultants beyond the period of time initially agreed to and the consultants began performing duties previously performed by the employee. The employer noted this and retrenched the employee without notice, consultation or proper consideration of alternatives. It was held that this was not a case of genuine redundancy.

Sale of business

Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10 (9 March 2005), [(2005) 222 CLR 241].

A packaging and paper company sold its paper business to a wholly owned subsidiary. As part of a demerger, the employer gave notice to its employees that their employment was terminated. At the same time, the subsidiary offered employment to the same employees on the same terms with continued service. Although the CFMEU argued that these employees should have been paid redundancy payments the High Court held that the employees were not entitled to redundancy payments as in the context of a demerger, the employees' positions were not redundant.