What every employer must know before they make a redundancy in Australia - the requirements of effecting a 'genuine redundancy'


Employers are currently able to defend unfair dismissal claims on the basis that a termination was a “genuine redundancy”. In order to rely on this defence the employer must demonstrate that it no longer required the employee’s role to be performed because of changes to the operational requirements of the employer’s enterprise and it must have satisfied the consultation obligations in any modern award or enterprise agreement. In addition, it must not have been reasonable in all the circumstances for the employee to have been redeployed either within the employer’s enterprise or within a related entity of the employer.

The scope of the requirement to redeploy within an associated entity has now become clearer with the findings of Commissioner Raffaelli in Henry Jon Howarth and Ors v Ulan Coal Mines Limited (12 July 2010). This key decision from Fair Work Australia sends a clear message that employers must proactively search and secure employment for employees whose roles are no longer required both within the employer’s entity and within any other related entity if they wish to demonstrate a ‘genuine redundancy’. It may not be sufficient for an employer to claim that related entities are separate operating companies and employers in their own right who are not able to be dictated to by other companies about who they should employ if genuine vacancies exist.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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