All modern awards and enterprise agreements include an obligation to consult with employees about ‘major workplace changes’ where those changes ‘are likely to have significant effects on employees’. Such changes include those which may result in cessation of employment.

In general terms, it has been understood that where a business has made a decision to restructure a division within the business – or a role – and that decision may lead to redundancy, the award or agreement consultation provisions are triggered and the business will be obliged to consult with affected employees. However, the recent Fair Work Commission (Commission) decision in Nicholas Williams v KTC Refrigeration & Conditioning Pty Ltd (Williams) has given cause to further consider when exactly consultation provisions are enlivened.

Why the obligation to consult matters

A dismissal will not be an ‘unfair dismissal’ under the Fair Work Act 2009 (Cth) (Act) where it occurs due to ‘genuine redundancy’. A ‘genuine redundancy’ is when a business:

• no longer require the job to be performed by anyone because of changes in the operational requirements of the business’ enterprise; and
• has complied with any obligation in a modern award or enterprise agreement to consult. This element only applies where an award or an enterprise agreement applies to the employee’s employment.

If a business fails to consult with an employee, in circumstances where they were obliged to do so, the dismissal will not be a genuine...

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