Five employment law cases that shook the world: #4 No redundancy consultation, no unfair dismissal
As part of a series of articles we are examining five employment law cases that shook the world (or at least members of the Australian HR community).
Section 385 of the Fair Work Act 2009 provides that a claim for unfair dismissal cannot be made if the dismissal was a case of “genuine redundancy”. Section 389 defines genuine redundancy as follows (with our emphasis):
“(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
In Maswan v Escada Textilvertrieb T/A ESCADA  FWA 4239 Fair Work Australia (as it then was) was called upon to deal with an application for unfair dismissal by Mr Maswan. Fair Work Australia had no difficulty in finding that Mr Maswan had been dismissed for reason of redundancy. It was also clear that the employer had failed to follow the provisions of the General Retail Award 2010 which required it consult employees in respect of redundancies. It therefore followed that that Mr Maswan’s employment was not a case of genuine redundancy as defined by the Act.
The more difficult question was whether the lack of consultation meant that Mr Maswan had been unfairly dismissed. Unfair dismissal pursuant to section 385 of the Fair Work Act 2009 includes the requirement that the dismissal is “harsh, unjust or unreasonable.”
Vice President Watson had this to say in respect of Mr Maswan’s dismissal in this context (with our emphasis):
 In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But as it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.
 In all of the circumstances I am not satisfied that the termination of Mr Maswan’s employment was harsh, unjust or unreasonable.
 For the reasons above I find that Mr Maslan’s dismissal does not fall within the definition of a genuine redundancy in the Act because of the failure of Escada to comply with its obligations to consult over proposed terminations arising from changes at the workplace.
 I also find that the termination of his employment is not harsh, unjust or unreasonable as the decision was the result of a soundly based business decision to restructure the operations and merge two positions. The failure to consult did not lead to a different conclusion to that which would have, in all likelihood, been reached had consultation occurred. Therefore this failure does not render the dismissal unfair. The application is dismissed.
The case is therefore authority for the proposition that failure to comply with consultation obligations contained in a modern award does not necessarily mean an associated termination of employment will be an unfair dismissal, if the consultation would not have made any difference to the decision to terminate employment.