How long does it take to consult with an employee about a redundancy?

Hours? Weeks? Months?

Last week a Full Bench of the FWC refused permission to appeal from a decision of Commissioner Cribb in November 2016 which concerned whether the dismissal of an employee was a genuine redundancy.

The Commissioner found that the employer did not comply with its obligations to consult with the employee about the impact which the company’s loss of a trolley collection contract would have on the employee’s job. The employee was covered by a Modern Award and the employer was obliged under the Modern Award to consult with him about the changes to its operational requirements and the impact on his job.

The Commissioner found that there was a valid reason for the dismissal, being the changes in the employer’s operational requirements. However she found that the redundancy was not genuine and was harsh because the employee was not advised as soon as his employer knew that the company’s trolley collection contract had been terminated.

Reinstatement was found to be inappropriate. What is interesting about this case, and reason for the employee’s appeal is the compensation amount. In determining the appropriate compensation the Commissioner aligned the compensation with how long it would have taken the employer to comply with the consultation requirements under the Modern Award:

“[55] Given the reason for Mr Maat’s dismissal, it is my view that the remuneration that Mr Maat would have received, or would have been likely to receive, if he had not been dismissed would have been another two weeks’ remuneration. This is on the basis that two weeks is the period that it would have taken the Respondent to comply with its obligations in the relevant modern award to consult with Mr Maat about the redundancy that led to his dismissal.

An order for 2 weeks’ remuneration plus superannuation was made.

No doubt this was an unsatisfactory compensation outcome for the employee. For employers considering redundancies the case is a reminder to check whether consultation obligations apply. If so paying lip service to consultation is likely to be inadequate – employers should consult as appropriately suits the circumstances and commence the process as soon as a definite decision to implement the changes takes place. Failure to adequately comply with the consultation requirements is likely to render a dismissal unfair even where there is a valid reason for the dismissal.