Workplace Change and Unfair Dismissal

Summary

• The Health Professionals and Support Services Award 2010 (the Award) requires employers to consult with their employees before effecting certain workplace changes.

• Consultation should aim to discuss how to reduce adverse consequences of the workplace change but is not intended to provide an opportunity for the employee to change the employer’s mind regarding workplace changes.

• When an employer is obligated to provide consultation with employees, this must occur as early as practicable. An employer’s ongoing business obligations, such as security and client confidentiality, are relevant considerations when determining when it is practicable to have the consultation.

From time to time employers are required to make operational changes to the structure of their Practice. This may create reason to alter the employment contracts of staff within the Practice, or could lead to the redundancy of employee positons. Modern workplace Awards attempt to protect employees by placing an obligation on employers to consult with employees prior to enforcing major changes. Under the Award, Health Practice Support Staff must be consulted when an employer has made a definite decision to alter the operational structure of the practice, causing a change in employee conditions including available work hours, roles and responsibilities, work location, and availability of positions.

Employee consultation requires both notifications of workplace changes, and discussion with affected employees on the changes to their employment contract and potential measures to mitigate adverse effects. Employers are required to ensure that consultation occurs as early as practicable after a definite decision has been made. What is deemed to be ‘as early as practicable’ was considered in the case of Ventyx v Murray [2014] FWCFB 2143 (“Ventyx v Murray”). In that case, the Full Bench of the Fair Work Commission stated that while employers should ensure that consultation occurs ‘with expedition’ this is subject to practical consideration of the employers’ ongoing obligations to their clients.

Ventyx v Murray

Mr Paul Murray was employed by Ventyx as a Program Manager in January 2012. In 2013 Ventyx undertook a review of its operations, which resulted in the redundancy of 100 employment positions worldwide.

On 23 June 2013 Ventyx made a definite decision regarding the proposed company restructure that would result in the redundancy of Mr Murray’s position with Ventyx.

Mr Murray was subject to the Professional Employees Award 2010, requiring that he be consulted before any decision that would result in major alteration to his employment, including redundancy. On 1 July 2013, Mr Murray was called into a meeting with members of Ventyx’s Human Resources Team. During the meeting Mr Murray was notified of his redundancy due to operational changes within the workplace, and was provided an opportunity to discuss the termination of his position. Mr Murray was also handed a redundancy package that would come into effect the following day on 2 July 2013.

Following termination of his position with Ventyx, Mr Murray made a claim to the Fair Work Commission stating that he had been unfairly dismissed. Specifically, Mr Murray stated that Ventyx had not complied with their obligation of consultation as stated under the relevant workplace Award. Consultation did not occur until eight days after the final decision regarding his termination of employment was made, which was not as early as practicable.

Ventyx argued that due to considerations of ongoing client confidentiality they could not provide consultation with Mr Murray until his computer access had been restricted. This was necessary to prevent any risk of misappropriation of confidential client data. In addition, Ventyx stated that as a global company, they wished to roll out the redundancies in a consistent manner worldwide, which also created a delay in the process.

Decision of Full Bench:

The Full Bench of the Fair Work Commission accepted that both considerations regarding ongoing client confidentiality and management of a global redundancy scheme justified a delay in consultation with Mr Murray. The Full Bench emphasised that the term ‘as early as practicable’ takes into consideration that the employer must balance the needs of the employee with the ongoing needs of the business.

In addition, the Full Bench noted that the obligation of consultation placed on employers is required to occur after the employer has made a definite decision. As such, the obligation does not require that the employee must be given a chance the change the mind of the employer. Rather, the consultation process is to act as an opportunity to discuss ways to lessen the issues that may arise as a result of the decision by the employer.

Consideration for employers:

Workplace Awards place obligations on employers that aim to provide greater protection for employees in certain situations. Employers should be aware of which workplace Awards are applicable to staff within their practice.

Modern Awards place an obligation on employers to consult with their employees before taking action that significantly affects their employment within the practice.

Employers should take note of their obligation to consult with their employees after they have made a definite decision. While employers should aim to have this consultation in a timely fashion they are allowed to consider their continued obligations as a business to determine when it would be practical to do so. During the consultation, employers are required to explain how the workplace changes will affect the employee, and allow the employee to provide input on potential ways to reduce the impact of the changes. For more information simply contact us at info@clinlegal.com.au or visit www.clinlegal.com.au

This article was written by Rebecca Hyde, Workplace Compliance Advisor at ClinLegal. Rebecca holds a Bachelor of Laws and Legal Practice (Hons) and a Bachelor of Behavioural Science (Psychology).

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