Redundancy & redeployment obligations – agency labour workers


Posted By on 21/06/16 at 9:41 AM

Do redundancy and redeployment obligations extend to considering work performed by agency labour workers? Yes they can!

The commonly accepted orthodoxy up until 2014 was that only vacant internal positions needed to be considered for the purposes of redeployment opportunities inside the company or an associated entity when establishing the ‘genuine redundancy’ defence to unfair dismissal.

However, in case you missed it, the Full Bench decision of Technical and Further Education Commission t/a TAFE NSW v L. Pykett [2014] FWCFB 714 (Pykett) quietly changed all that by saying (in reliance on the Explanatory Memorandum) that any “other work” must also be considered beyond merely a vacant role. In recent times there have been a number of single member decisions querying whether work performed by agency labour workers falls within the concept of “other work” as set out in Pykett – see for example Catanzariti VP in Brown and Ors v Clermont Coal Operations Pty Ltd T/A Clermont Open Cut [2015] FWC 3862. 

While there have been diverging final outcomes in these cases based on the differing extent to which different members of the Commission were prepared to go to question the employer’s business/labour model, the principles have been accepted that:

  • the role of an employer is to positively redeploy someone – ie. it is not just a passive exercise in making vacant roles available for people to consider;
  • employers must consider more than merely vacant positions within their organisations – they must consider a broader concept of “work” as distinct from merely a vacant job; and
  • the concept of “other work” can extend to consideration of the reasonableness of re-shaping labour hire work if it is regular and systematic.

What does this mean for employers?

Employers face exposure to unfair dismissal claims if they do not ensure that they have fully discharged their redeployment obligations when considering redundancies.

With the above in mind, the lesson for us is still to place a real emphasis on what you do in the front end before retrenching any roles. Examples that immediately spring to mind include considering:

  • short or long term leave cover opportunities;
  • job modification to pick up the new work contemplated by a restructure that remains within an employee’s skills and training (ie. akin to the reverse of what one might need to reasonably do to accommodate medical restrictions); and
  • whether agency labour hire is used consistently with its appropriate rationales in order to assess whether redundant employees could be redeployed to that work (or at least having done homework on this point so as to justify the reasonableness of not redeploying employees to this work).

Bearing in mind these decisions together with the various State Government inquiries into labour hire and the High Court’s decision last year in Quest, it certainly seems to us that agency labour hire seems to be under increasing threat!

KHQ Lawyers - Michael Cochrane

Michael Cochrane Principal Solicitor

Michael draws on more than 10 years of employment and industrial law experience, together with his corporate background, to provide advice and support focused on delivering strong commercial outcomes... Read More