What is a ‘Genuine Redundancy’?

Since the commencement of the Fair Work Act on 1 July 2009, an employee is exempt from commencing a claim for unfair dismissal where their employment is terminated for ‘genuine redundancy’ reasons. For this to apply the dismissal must constitute a ‘genuine redundancy’ and to be a ‘genuine redundancy’ the position performed by the employee must no longer exist – i.e. the employer no longer needs it to be performed by anyone.

In a decision of Fair Work Australia in Kekeris v A. Hartrodt Australia Pty Ltd T/A A.Hartrodt on 19 February 2010, it was found that it would still be a genuine redundancy even if the employer still requires the duties of the redundant position to be performed.

Generally this would occur where an employer decides to restructure its operations and determines that the duties performed as part of that position could be absorbed by other positions. In this case it was determined that the work performed by four area managers could be performed by three, with the duties of the redundant position divided between the remaining three managers.

The employee argued that her position wasn’t genuinely redundant and she had been unfairly dismissed because her duties were still being performed by the remaining managers. SDP Hamberger rejected this argument even though he agreed there were similarities between the duties she had performed and those required of the remaining managers.

In this case it was found that the evidence clearly supported that the employer no longer required the employee’s position to be performed by anyone and that the test wasn’t “whether the duties survive” but “whether the job previously performed by the applicant still exists” – “it can still be a ‘genuine redundancy’ where the duties of the previous job persist but are redistributed to other positions”.

KEY POINTS: Ensure that you can establish that the position is no longer required for operational reasons – even if the duties are redistributed amongst existing employees. The legislation requires a fair procedure to be followed and legal advice should be sought.