A new ruling should spur employers in Australia to consider whether employees they intend to make redundant could be redeployed into roles being performed by other workers, experts have said.
Melbourne-based Ben McKinley and Stefania Silvestro of Pinsent Masons were commenting after a new ruling by the Australian High Court, which confirms that the Fair Work Commission (FWC) – the Australian workplace tribunal – has authority to inquire “whether an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for an employee who would otherwise have been redundant”.
“This is a change from the previously understood view that employers are only required to consider suitable vacant roles as redeployment options for employees they otherwise intend to make redundant,” McKinley said.
“This is a significant decision for employers implementing organisational restructures and redundancies. It now may be that direct employees take precedence over contractors, consultants and labour hire employees, who may have their engagements terminated so a permanent employee whose own role has been made redundant can take their place,” he said.
Silvestro added: “The decision creates uncertainty for employers whose workforce planning and assessment of redeployment options will be scrutinised, and potentially overturned, by the FWC, which can replace the employer’s assessment of workforce composition with its own.”
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