2 min read

Insourcing to provide redeployment for retrenched employees

A dismissal that is a case of genuine redundancy cannot be challenged as an unfair dismissal under the Fair Work Act 2009 (Cth).

A dismissal will not be a case of genuine redundancy if it would have been reasonable in all the circumstances for the dismissed person to be redeployed within the employer’s enterprise or the enterprise of an associated entity.

If a position is available within the employer’s enterprise or the enterprise of an associated entity, the question of whether it would be reasonable for this position to be offered to the employee to avoid retrenchment depends on the match between the employee’s skills, qualifications and experience and that required to perform the job, together with the location and remuneration of the job.

An issue that may arise is whether an ‘available position’ is one performed by third-party contractors. To what extent would it be reasonable to insource that role and have the redundant employee offered redeployment into it?

This issue was considered by the Fair Work Commission (FWC) in Helensburgh Coal v Bartley (2021).

The employer argued the work carried out by the employees of the contractors was not work within the employer’s enterprise and could not, therefore, present an opportunity for redeployment.

The FWC disagreed and ruled that, in assessing whether it would be reasonable to offer redeployment, there was no automatic exclusion of jobs performed by labour hire employees or third-party contractors. It noted, however, that it would never be reasonable for an employer to redeploy retrenched employees to a contractor. The work to which an employee might be redeployed must, ultimately, be work over which the employer has control.

The reasonableness of redeployment into work performed by contractors is to be assessed in all the circumstances at the time of potential retrenchment, having regard to such factors as:

  • the extent to which the employer can control the work of the contractor;
  • the period the contract has run to date and how much longer it has to run;
  • the extent to which insourcing the jobs would involve a change to the employer’s business strategy;
  • the history of contracting in the business;
  • the rights of contractors and their employees; and
  • the skills and training of the retrenched employees, and whether they could feasibly or practically perform the work performed by the contractor’s employees.

The difficulty for employees is that they will not know many of these things. They might end up wasting their time and resources challenging their dismissal in the FWC as a non-genuine redundancy, when it was not reasonable, in all of the circumstances that applied at the time of their retrenchment, for their employer to insource outsourced jobs and redeploy the employees into those jobs.

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