Workplace Consultation–is it Required? Redundancy and Stand Down

Workplace Consultation

When is an employer obligated to consult?

The obligation for an employer to consult with its employees about major workplace change and/or changes to rosters or hours of work, are provided for in all modern awards and enterprise agreements.

Consultation is required where an employer has made a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have a significant effect on employees.

Significant effects on employees includes:

  • termination of employment;
  • major changes in the composition, operation or size of the employer’s workforce or in the skills required;
  • loss of, or reduction in, job or promotion opportunities;
  • loss of, or reduction in, job tenure;
  • alteration of hours of work;
  • the need for employees to be retrained or transferred to other work or locations; or
  • job restructuring.

An employer is also obligated to consult in circumstances where they propose to change the regular roster or ordinary hours of work of an employee, other than an employee whose working hours are irregular, sporadic or unpredictable.

What does consult mean?

Once the employer has made a definite decision to make a major change, then they must:

  • give notice of the changes to all employees who may be affected by them and their representatives (if any);
  • discuss with the affected employees and their representatives (if any):
  1. the introduction of the changes;
  2. their likely effect on employees; and
  3. measures to avoid or reduce the adverse effects of the changes on employees; and
  • commence discussions as soon as practicable after the definite decision has been made.

For the purpose of the consultation discussions, the employer must give, in writing, to the affected employees and their representatives (if any) all relevant information about the changes including their nature, their expected effect on employees, and any other matters likely to affect employees.

During the consultation process the employee is not required to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

The employer is obligated to promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussions during the consultation process.

Redundancy

Section 531 of the Fair Work Act 2009 (Cth) provides that an employer who has decided to dismiss 15 or more employees by way of redundancy, then then that employer is required to notify and consult with each registered employee association (i.e. unions) of which any of the employees are a member of.

The employer is required to provide unions with the notice and an opportunity to consult:

  • as soon as practicable after making the decision; and
  • before dismissing an employee in accordance with the decision.

If an employer is obligated to consult about redundancy and fails to do so, then they may be at risk of an unfair dismissal application being made against them. It will not be a case of genuine redundancy if an employer does not comply with its obligation in a modern award or enterprise agreement to consult about redundancy.

Before making the decision to terminate an employee on the grounds of redundancy, an employer is required to genuinely consult with the affected employees. Consultation is not considered to be genuine if the employer simply provides an employee perfunctory advice on what is about to happen. An employee must be provided with an opportunity to influence the decision maker before the dismissal is affected.

Stand down of employees

Section 524(1) of the Fair Work Act 2009 (Cth) provides that an employer may stand down an employee without pay during a period where the employee cannot be usefully employed because of one of the following circumstances:

  • industrial action (other than industrial action organised or engaged in by the employer);
  • a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or
  • a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

An employer may not stand down an employee under section 524(1) of the Fair Work Act if:

  • an enterprise agreement, or a contract of employment, applies to the employer and the employee; and
  • the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of one of the above mentioned circumstances.

An enterprise agreement or a contract of employment may outline additional requirements that an employer be obligated to perform before standing down an employee. For example, the employer may be required to provide notice and/or consult with the affected employees.

If such a term exists, then the employer is obligated to consult with the affected employee. So, it is important to review the terms of your enterprise agreement and/or contract employment and identify if there is a stand down provision that applies to you.

Unfortunately, no modern award provides for a stand down.

If you have any questions or require advice in relation to workplace consultation, please contact Anderson Gray Lawyers on 1300 851 430 to speak with one of our employment lawyers.