A recent case before the Fair Work Commission (FWC) exposed cracks that appear when employers make an employee redundant without fully exploring redeployment options. How can you avoid this situation?
Human resources professionals need to note that redeployment obligations include considering less senior positions for that employee, according to the FWC’s latest finding. Failing to offer less senior positions – if they are available – might undermine the genuineness of the redundancy and make it difficult for an employer to defend an unfair dismissal claim.
The case in question, Dr Petranel Ferrao v Peter MacCallum Cancer Institute  FWC 4953, considered whether the plaintiff had been dismissed unfairly or on the basis of a genuine redundancy. The genuineness of the redundancy in these circumstances depended largely on the employer satisfying its obligation to explore redeployment.
Dr Ferrao had been employed with the Peter MacCallum Cancer Institute in various roles and projects for more than ten years. She was employed to lead a grant funded research project for a period of three years when dismissed.
During the project, and particularly towards its conclusion, Dr Ferrao understood her employer was de-prioritising the project and that her role would be made redundant. When implementing the redundancy, the employer stated it had explored redeployment opportunities for Dr Ferrao, as required, but could not identify any. Yet Dr Ferrao had independently applied for two lower-level positions within the Institute during the redeployment period and was unsuccessful because of her seniority.
The FWC concluded that Dr Ferrao’s dismissal was unfair because, in the circumstances, redeployment was possible. The FWC noted that Dr Ferrao’s experience and high skill level would have been transferrable to other roles, and the failure to redeploy her demonstrated a “lack of real efforts to achieve redeployment.”
Importantly, the FWC confirmed that where an employer advertises an internal position and subjects an employee to a competitive selection process, rather than redeploying the employee to that position, the employer might not be able to demonstrate the genuineness of the redundancy to defend an unfair dismissal claim. It also confirmed that when considering redeployment (rather than a competitive selection process) an employee’s seniority should not be an obstacle.
This is an important lesson for employers, as unfair dismissal claims are easy to file, and the financial repercussion can hit hard – not to mention the damage to employer brand. Dr Ferrao was awarded 26 weeks’ compensation.
While a position might be redundant for genuine operational reasons, it might not be a genuine redundancy (for the purpose of defending an unfair dismissal claim) if the impacted employees are overlooked for redeployment. Make sure you explore every viable option before making employees redundant. Otherwise, lack of due diligence can come back to bite you.