Employment Lawyers NSW

… make sure that you are aware of the consequences of doing so or you may find yourself in a situation where the dismissed employee can bring a claim against you

It is a business owner’s prerogative to restructure their business to make it more efficient. However, as an employer you need to be aware of some of the “hidden” risks of making employees redundant and make sure that your restructure isn’t viewed as covering up an alternate reason for terminating the employee.

In the recent case of Heraud v Roy Morgan Research Ltd (No 2) [2016] FCCA 1797, the FWC determined that the employer had taken adverse action against an employee who was on maternity leave at the time her position was made redundant and was ordered to pay her compensation for economic and non-economic loss.

The employee was informed that her position was being made redundant due to a company restructure just as she was nearing the end of her maternity leave.

The employee had made a request for flexible work arrangements but her employment was terminated by way of redundancy.

The FWC considered that, in making the employee’s position redundant and thus terminating her employment, the employer had taken adverse action against her and that the reason it did this was because she had exercised her workplace rights to take maternity leave and to request flexible working arrangement.

The employee was awarded compensation for non-economic loss and economic loss, and the FWC commented that it was important in this case to recognise “… that prevailing community standards demand recognition of the fundamental entitlement of an employee to take paternal leave to care for their child …”

Employers also need to be mindful of their obligations about:

  • Consulting with employees covered by a modern award or enterprise agreement to see whether there are any alternative arrangements that can be put in place to avoid redundancies.
  • Redeploying employees to other positions wherever possible, even if that position is at a lower level with less remuneration.

If you are restructuring your business (or there is a transfer of business) and there are likely to be redundancies, you should obtain advice about the process to minimise the risk of an employee making a successful adverse action or unfair dismissal claim.

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