Unfair Dismissal and a Genuine Redundancy – Critical Lessons for NFP Organisations and others

The Fair Work Commission's (FWC) recent decision in Frederick Deon Du Preez v MSWA Limited underscores some valuable lessons for for NFPs and other organisations when carrying out restructures. Here, Employment Lawyer, Amogh Kadhe, unpacks key highlights of the case, and what NFPs need to keep in mind when considering making roles redundant.

Key Highlights:

• Mr Du Preez worked as a Finance Data Analyst at MSWA. MSWA carried out some internal reviews of Mr Du Preez’s team and determined that the organisation needed to carry out a restructure due to some operational requirements, and as a result of those changes, Mr Du Preez’s role was made redundant. Mr Du Preez claims that his dismissal did not comply with the definition of genuine redundancy in s389 of the FW Act and was therefore unfair. 

• Genuine redundancy is clearly defined in the FW Act and occurs where an employer no longer requires an employee’s role to be performed by anyone because of changes in the operational requirements of the organisation AND where the employer has complied with their obligations under any applicable Modern Award or Enterprise Agreement. 

• Not genuine redundancy if redeployment within the organisation was reasonable in all the circumstances. 

• Redundancy Process must be followed: Despite finding that MSWA had legitimate operational reasons for making Mr Du Preez’s role redundant, MSWA failed to follow the required process outlined in the enterprise agreement they had in place which covered Mr Du Preez. Specifically, they failed to comply with the consultation requirements under the enterprise agreement 

Lessons for Organisations:

1. Familiarise yourself with the legislative requirements (i.e. processes under the Fair Work Act, and any applicable Modern Award / Enterprise Agreement). Some things organisations can ask themselves include: 

• Is the employee lodging the UD claim protected from UD under the FW Act (i.e. has the employee worked for a minimum period of 6 months, was the unfair dismissal claim lodged within 21 days, etc.); 

• Is there an applicable Modern Award or an Enterprise Agreement that applies to the employee?; 

• Is the employee’s role being terminated due to a genuine redundancy?; and

• If yes to the above question, what requirements are imposed under those two legislative instruments? (for example, are there specific consultation obligations on the employer before making a major workplace change (which includes redundancies) – and if there are have those been followed?), 

NB: The FWC also stressed on the importance of the consultation requirements – stating that employers should never take this for granted. Consulting gives “employees the potential to affect the end outcome, which can include averting the need for their role to be made redundant or otherwise mitigating the effect of a redundancy”.

2. Maintain transparent and clear communication with employees regarding changes to their roles and the reasons behind such decisions.

3. Document every step in the redundancy and dismissal process to provide evidence of compliance with legal obligations. 

4. In ascertaining whether the dismissal was “harsh, unjust or unreasonable” the FWC will consider all factors under s387 of the FW Act and a “failure to consult” does not automatically mean that a dismissal was unfair.

This decision serves as a vital reminder that meticulous adherence to procedural requirements is not just a legal obligation but also a cornerstone of fair and compliant workplace practices. 

For help navigating employee dismissals or other workplace-related issues, please reach out to our Employment + Workplace Relations lawyers via: [email protected]

To read the full Frederick Deon Du Preez v MSWA Limited case, please visit here.