Pub­li­ca­tions

Can a Change in Required Skills and Com­pe­ten­cies Make an Exis­tent Role Redundant?


IN BRIEF

The Full Bench of the Fair Work Com­mis­sion has recent­ly con­clud­ed that where an employ­er wants to increase the skill lev­el of a par­tic­u­lar role for oper­a­tional based rea­sons, it may do so by mak­ing the exist­ing posi­tion redun­dant and replac­ing it with a new posi­tion that meets the busi­ness­es oper­a­tional needs. The Com­mis­sion in its deci­sion has made it clear that this should only occur where it would be unrea­son­able for the exist­ing employ­ee to under­take the fur­ther required training.


THE FACTS

In Mack­ay Taxi Hold­ings v Wil­son [2014] FWCFB 1043, the employ­er under­took a review of its busi­ness oper­a­tional needs and deter­mined that it need­ed to increase the capac­i­ty of the admin­is­tra­tion and the new role would require the per­son to have bookkeeping/​accounting respon­si­bil­i­ties and a Cer­tifi­cate IV in Book­keep­ing. Ulti­mate­ly it meant that the exist­ing admin­is­tra­tion posi­tion would no longer be required.

The exist­ing employ­ee did not have these qual­i­fi­ca­tions and to pro­vide such train­ing would take a min­i­mum peri­od of 12 months and require a mon­e­tary out­lay that the busi­ness could not afford at the time. The employ­er also did not have con­fi­dence that the employ­ee would com­plete the train­ing. Based on these con­sid­er­a­tions the employ­er did not con­sid­er it rea­son­able to retrain the employ­ee. The employ­er noti­fied the employ­ee that her posi­tion was redun­dant on the basis that she could no longer per­form the duties required by the high­er lev­el posi­tion. The employ­er adver­tised the new posi­tion and allowed the employ­ee to apply for it. A more expe­ri­enced per­son applied for and was giv­en the new position.

The employ­ee sub­se­quent­ly filed an unfair dis­missal claim against her employer.

Com­mis­sion­er Booth at First Instance

The Appli­cant sub­mit­ted to the Com­mis­sion that the redun­dan­cy was not a gen­uine redun­dan­cy because 70% of the duties car­ried out in the cur­rent posi­tion would still be required in the new posi­tion. The Appli­cant fur­ther sub­mit­ted that with the sup­port of the company’s accounts team and under­tak­ing the for­mal train­ing, she could have per­formed the new posi­tion to a high standard.

The Respon­dent how­ev­er sub­mit­ted that the board of the organ­i­sa­tion had deter­mined that the busi­ness need­ed restruc­tur­ing with a view to increas­ing the capac­i­ty of the admin­is­tra­tion func­tion at a high­er lev­el. It was there­fore deter­mined that there would not be suf­fi­cient work to keep a qual­i­fied book­keep­er and an admin­is­tra­tor occu­pied full time result­ing in the deci­sion that the exist­ing admin­is­tra­tive posi­tion would no longer be required.

Com­mis­sion­er Booth at first instance was not con­vinced that the changes insti­tut­ed by the Respon­dent result­ed in a gen­uine redun­dan­cy. Com­mis­sion­er Booth con­clud­ed that the changes were made to a con­tin­u­ing and exist­ing role which would not sat­is­fy that statu­to­ry def­i­n­i­tion of redun­dan­cy which requires that the job is no longer required to be per­formed by anybody.

Appeal to the Full Bench

The Respon­dent upon appeal claimed that Com­mis­sion­er Booth had erred in the con­clu­sion that the changes were to an exist­ing and con­tin­u­ing role. The Respon­dent sub­mit­ted that the new require­ment of high­er qual­i­fi­ca­tions was in fact required to give effect to new high­er lev­el duties mak­ing up the foun­da­tion of the new job and not mere add-ons to the exist­ing role.

The Full Bench agreed with the above sub­mis­sions and reject­ed the first instance deci­sion. The Full Bench held that the require­ment for a for­mal qual­i­fi­ca­tion was not a mere add-on but rather reflec­tive of oper­a­tional changes which gave effect to a require­ment for new and high­er lev­el duties required to be car­ried out by an appro­pri­ate qual­i­fied bookkeeper.

In arriv­ing at this deci­sion, the Full Bench expressed the view that the ques­tion is not whether the orig­i­nal duties or tasks con­tin­ue to be required to be per­formed, but rather that there are oper­a­tional-dri­ven changes to the posi­tion which would result in the job pre­vi­ous­ly per­formed by the appli­cant no longer exist­ing. In this regard the Full Bench quot­ed with approval, a pas­sage from a deci­sion of Ham­berg­er SDP in Kek­eris and A,. Hartrodt Aus­tralia Pty Ltd [2010] FWA 674 :

When one looks at the spe­cif­ic duties per­formed by the appli­cant pri­or to her ter­mi­na­tion they have much in com­mon with those of the new posi­tion in the new struc­ture. The test is not how­ev­er whether the duties sur­vive. Para­graph 1548 of the explana­to­ry mem­o­ran­dum makes it clear that it can still be a gen­uine redun­dan­cy’ where the duties of a pre­vi­ous job per­sist but are redis­trib­uted to oth­er posi­tions. The test is whether the job pre­vi­ous­ly per­formed by the appli­cant still exists.”

POINTS TO TAKE AWAY

This deci­sion pro­vides a use­ful bench­mark for employ­ers when mak­ing oper­a­tional changes to their busi­ness and con­sid­er­ing whether to make a posi­tion redun­dant or not.

When employ­ers are propos­ing oper­a­tional changes which affect the posi­tion of an exist­ing employ­ee, they should give con­sid­er­a­tion as to whether, in line with their busi­ness inter­ests, they can rea­son­ably jus­ti­fy retrain­ing or up skilling the exist­ing employee.

As demon­strat­ed in this case, the time and cost required to retrain an employ­ee will be sig­nif­i­cant fac­tors for con­sid­er­a­tion. A fail­ure to gen­uine­ly con­sid­er retrain­ing an exist­ing employ­ee may be viewed adverse­ly by the Fair Work Com­mis­sion as indica­tive of the employer’s motives, and may affect their prospects of suc­cess­ful­ly resist­ing an unfair dis­missal claim.