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Would you like my redundancy payment instead? Is an employer obliged to consider ‘job swaps’ in a restructure?

A recent decision[1] of the Full Bench of the Fair Work Commission considers an employer’s redeployment obligations under section 389(2) of the Fair Work Act 2009 and if it was reasonable in all the circumstances for employees to be redeployed by way of ’job swaps’ with other employees who wished to volunteer for redundancy.

Background

This case concerned an appeal brought by seven former train drivers of Pacific National Bulk whose positions were made redundant in mid-2015. The employees initially made unfair dismissal claims. The employer’s response was that there was no jurisdiction to bring the applications because their dismissals were a case of genuine redundancy.

Section 389(2) of the Act states that if redeployment was reasonable in all the circumstances then a dismissal was not a case of genuine redundancy. On appeal, the employees argued that the Commissioner at first instance failed to properly determine whether ‘in all the circumstances’ it would have been reasonable for the employer to redeploy each of the employees where other employees in similar positions were willing to accept voluntary redundancy.

Redundancy Swap?

Importantly, the Full Bench said that there is no general obligation on an employer to implement or facilitate a process of voluntary redundancy swaps. However, in this case, the Full Bench found that the possibility of voluntary redundancy swaps should have been considered by the employer in order to satisfy its obligations under section 389(2). In reaching this conclusion, the Full Bench considered the following factors to be relevant:

  • The size of the employer’s business
  • The number of employees performing the same or substantially the same role and whether or not allowing a swap would place onerous training requirements on the employer
  • The fact that some of the potential swaps were in depots which were close to where an affected employee currently worked. This meant there would have been minimal costs associated with transferring the employee to a new location
  • The fact that the employer had previously allowed swaps in similar circumstances
  • The employer had, early on, suggested swaps as a possibility to mitigate the effects of redundancy.

Despite finding in this way, the Full Bench stated that, generally, whether or not it would have been ‘reasonable in all the circumstances’ for an employer to allow employees whose positions are redundant to swap with other employees who wanted to volunteer for redundancy, would depend on all of the facts of the case.

Lessons for Employers

The idea of ‘redundancy swaps’ can have a financial and logistical impact on an employer. Clearly, more senior and experienced employees may be eager to swap their jobs to obtain a redundancy payment. When dealing with a potential redundancy, an employer should consider all the relevant circumstances to determine if an employee can be appropriately redeployed within its organisation. Depending on the nature of the business and any prior practice or expectation of employees, including whether a voluntary redundancy swap has ever been offered to employees, it could be that the obligation to redeploy includes exploring the possibility of a job swap before implementing retrenchments.

AUTHORS
VANESSA ANDERSEN 5CM BW JPG 2016 Vanessa Andersen | Partner
T +61 2 9291 6294
E vanessa.andersen@maddocks.com.au
 BRIGID CLARK 5CM BW JPG 2014  

Brigid Clark | Senior Associate
T +61 2 9291 6130
E brigid.clark@maddocks.com.au

Andrew Yahl 5cm BW jpg 2014  

Andrew Yahl | Lawyer
T +61 2 9291 6285
E andrew.yahl@maddocks.com.au

[1] Mr Grant Skinner; Mr Mark Pemberton; Mr Joshua Ross; Mr Ian Lucas; Mr Kadin Hill; Ms Abigail Bryant; Mr Mareck Preston v Asciano Services Pty Ltd T/A Pacific National Bulk [2017] FWCFB 574

A recent decision[1] of the Full Bench of the Fair Work Commission considers an employer’s redeployment obligations under section 389(2) of the Fair Work Act 2009 and if it was reasonable in all the circumstances for employees to be redeployed by way of ’job swaps’ with other employees who wished to volunteer for redundancy.

Background

This case concerned an appeal brought by seven former train drivers of Pacific National Bulk whose positions were made redundant in mid-2015. The employees initially made unfair dismissal claims. The employer’s response was that there was no jurisdiction to bring the applications because their dismissals were a case of genuine redundancy.

Section 389(2) of the Act states that if redeployment was reasonable in all the circumstances then a dismissal was not a case of genuine redundancy. On appeal, the employees argued that the Commissioner at first instance failed to properly determine whether ‘in all the circumstances’ it would have been reasonable for the employer to redeploy each of the employees where other employees in similar positions were willing to accept voluntary redundancy.

Redundancy Swap?

Importantly, the Full Bench said that there is no general obligation on an employer to implement or facilitate a process of voluntary redundancy swaps. However, in this case, the Full Bench found that the possibility of voluntary redundancy swaps should have been considered by the employer in order to satisfy its obligations under section 389(2). In reaching this conclusion, the Full Bench considered the following factors to be relevant:

  • The size of the employer’s business
  • The number of employees performing the same or substantially the same role and whether or not allowing a swap would place onerous training requirements on the employer
  • The fact that some of the potential swaps were in depots which were close to where an affected employee currently worked. This meant there would have been minimal costs associated with transferring the employee to a new location
  • The fact that the employer had previously allowed swaps in similar circumstances
  • The employer had, early on, suggested swaps as a possibility to mitigate the effects of redundancy.

Despite finding in this way, the Full Bench stated that, generally, whether or not it would have been ‘reasonable in all the circumstances’ for an employer to allow employees whose positions are redundant to swap with other employees who wanted to volunteer for redundancy, would depend on all of the facts of the case.

Lessons for Employers

The idea of ‘redundancy swaps’ can have a financial and logistical impact on an employer. Clearly, more senior and experienced employees may be eager to swap their jobs to obtain a redundancy payment. When dealing with a potential redundancy, an employer should consider all the relevant circumstances to determine if an employee can be appropriately redeployed within its organisation. Depending on the nature of the business and any prior practice or expectation of employees, including whether a voluntary redundancy swap has ever been offered to employees, it could be that the obligation to redeploy includes exploring the possibility of a job swap before implementing retrenchments.

AUTHORS
VANESSA ANDERSEN 5CM BW JPG 2016 Vanessa Andersen | Partner
T +61 2 9291 6294
E vanessa.andersen@maddocks.com.au
 BRIGID CLARK 5CM BW JPG 2014  

Brigid Clark | Senior Associate
T +61 2 9291 6130
E brigid.clark@maddocks.com.au

Andrew Yahl 5cm BW jpg 2014  

Andrew Yahl | Lawyer
T +61 2 9291 6285
E andrew.yahl@maddocks.com.au

[1] Mr Grant Skinner; Mr Mark Pemberton; Mr Joshua Ross; Mr Ian Lucas; Mr Kadin Hill; Ms Abigail Bryant; Mr Mareck Preston v Asciano Services Pty Ltd T/A Pacific National Bulk [2017] FWCFB 574