Approach COVID-19 related redundancies with caution

A recent decision of the Fair Work Commission (Commission) in Australian Municipal, Administrative, Clerical and Services Union v Auscript Australasia Pty Ltd highlights the importance of employers complying with mandatory consultation obligations in respect of COVID-19 related redundancies.

Summary

In January 2020, Auscript determined to close or partially close its offices in Adelaide, Sydney and Hobart and made 25 employees redundant, without consulting employees or their representatives. Since closing the abovementioned offices, and due to a 60 percent downturn in work due to the COVID-19 pandemic, Auscript determined it was necessary to make changes to its workforce. It subsequently notified its employees that it would enter a period of consultation.

In response, the Australian Municipal, Administrative, Clerical and Services Union (ASU) sought the urgent assistance of the Commission to prevent further redundancies and ensure Auscript comply with its consultation obligations under the relevant enterprise agreement. Commissioner Yilmaz agreed with the ASU that Auscript failed to give genuine consideration to options other than redundancy. The Commissioner criticized Auscript’s communication to employees, labelling it an “empty offer” and not “genuine consultation”, as it was clear the company had already made a decision unable to be influenced by employees or their representatives.

The decision is accessible via the following link:
https://www.fwc.gov.au/documents/decisionssigned/html/2020fwc1821.htm

Lessons for employers

Prior to dismissing employees for reasons of redundancy, it is absolutely critical that employers carefully and genuinely comply with the mandatory consultation obligations that appear in all modern awards and enterprise agreements. Failure to do so can result in successful unfair dismissal applications, pecuniary penalty orders and union disputation.

Employers are encouraged to seek specific advice if considering redundancies to ensure compliance with consultation obligations under modern awards and enterprise agreements.

EMA Legal is available to assist employees with any questions in relation to COVID-19 related redundancies or other aspects of employment law.