Redundant employee asked to train replacement loses unfair dismissal claim
The decision of Tracey Williams v Aurora Healthcare [2023] FWC 3030 provides a clear reminder about the principles for determining whether an employee’s termination of employment was a genuine redundancy in circumstances where they were competing with another employee for an available position.
The Facts
Tracey Williams (‘Applicant’) commenced employment with Aurora Healthcare (‘Respondent’) on 6 July 2021 as a Finance Manager. She was responsible for the Eden Private Hospital and Mackay Private Hospital. Mr Guha was employed by the Respondent as the Finance Manager for Townsville Hospital.
An operational restructure took place in May 2023 in response to economic pressures and rising costs following the COVID-19 pandemic. The Respondent identified that the two Finance Manager positions held by the Applicant and Mr Guha required a merger into a consolidated regional position. A consolidated Regional Finance Manager was created with responsibility for the Eden Private Hospital, Mackay Private Hospital and Townsville Private Hospital.
The Respondent used a standardised assessment against objective criteria in a selection matrix that was used for other employees whose positions were also identified for redundancy. The selection process included an assessment and rating of each impacted employee against standardised criteria of skills, performance, demonstration of values, potential to develop and progress, together with the requirements of the positions and their qualifications. The Respondent assessed and rated the Applicant and Mr Guha against these criteria and determined that Mr Guha was more suitable because his skills and capabilities were to the required standard.
Mr Guha was managing the Townsville Hospital to a higher standard, had multiple qualifications including a Bachelors and Masters degree in Commerce, and expressed a willingness to manage more hospitals. The Applicant who was managing two hospitals only wanted to manage one hospital which was inconsistent with the Respondent’s operational requirements of having a regional position with increased responsibilities. The Respondent made the decision to make the Applicant’s position redundant on 28 July 2023 with Mr Guha taking on the Regional Finance Manager position.
The Decision
The Applicant lodged an unfair dismissal application, and the Respondent raised a jurisdictional objection on the basis that the dismissal was a genuine redundancy. The Applicant submitted that her position was not genuinely redundant as Mr Guha required training in her former position. She stated that Mr Guha required access to many of her files and other resources she had used to undertake her role and that on one occasion following her dismissal Mr Guha asked her for assistance with a particular task.
The Fair Work Commission (‘FWC’) was required to determine 3 issues for the purpose of section 389 of the Fair Work Act 2009 (Cth).
Issue #1
The first issue was whether the Applicant’s employer no longer required the Applicant’s job to be performed by anyone else because of the operational requirements of the employer’s enterprise.
The FWC outlined that the relevant test is not whether the duties continue to be performed but whether the job continues to be performed (Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt [2010] FWA 674). Therefore, as the duties continue to be performed, it was not inconsistent with a genuine redundancy for Mr Guha to ask the Applicant about her duties as these were now required to be performed by him alone. What mattered was whether the job the Applicant previously performed was no longer required.
The FWC noted that the Respondent provided clear and unambiguous evidence that it had conducted a broad and thorough review to identify cost savings and that 24 positions were deemed redundant as a result of the review. The Applicant’s role and Mr Guha’s role were redundant roles. A more senior role of Regional Finance Manager was created to replace the previous two Finance Manager roles. Both the Applicant and Mr Guha were considered for the more senior role. On this basis, the FWC concluded that the Respondent no longer required the Applicant’s job to be performed because of the operational requirements despite some of her duties existing in some form in the more senior role.
Issue #2
The second issue was whether the Applicant’s employer complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
As there was no applicable modern award or enterprise agreement that applied to the Applicant, there was no requirement to consult about redundancy. Nevertheless, the Respondent did consult the Applicant about her position becoming redundant and there were no redeployment opportunities under an applicable modern award requiring the Respondent to offer a different position.
Issue #3
The third issue was whether it was reasonable in all the circumstances for the Applicant to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.
The Respondent submitted that the Applicant was not interested in redeployment and that there were no suitable alternative roles available at the time of her redundancy. It was noted that 23 out of 24 employees of the Respondent were also unable to be redeployed further evidencing that redeployment was not a viable option.
The Applicant submitted that the possibility of redeployment was discussed but most job vacancies were clinical and therefore unsuitable for her. The only available role was a Sunshine Coast Finance Manager role but the Applicant was not prepared to relocate due to family responsibilities. The FWC was satisfied that redeployment was not available to the Applicant and the Respondent had fulfilled its obligations.
The FWC concluded that the dismissal of the Applicant was a genuine redundancy for the purpose of section 389 of the FW Act and dismissed the application.
Key Takeaways
This decision is a reminder that it is the job that is made redundant and not the duties associated with the job. Therefore, where two jobs are made redundant and consolidated into one, the fact that the person in the consolidated job may ask questions or need some form of handover of duties does not negate the fact that a genuine redundancy occurred.
It is also an important reminder that objective criteria must be used when selecting one person over another for available positions within a new workforce structure. To do otherwise will bring the legitimacy of the restructure into question.
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