The Case

United Voice v Laminex Group Pty Limited T/A Laminex Cheltenham (2019)

Laminex Group Pty Limited T/A Laminex Cheltenham (Laminex) manufactures laminex benchtops.

Laminex employed two employees as treaters in the manufacturing process, who were also multi-skilled and who performed work in other parts of Laminex’s operations.

Laminex implemented a change to its operations which no longer required the work undertaken by the treaters. Laminex decided to move those employees who had been undertaking the treatment process into the pressing part of the manufacturing process.

The employees who had formerly worked as treaters claimed their roles were redundant, that the pressing work was not suitable alternative employment and they should be offered severance packages. The employees, represented by their union, commenced proceedings in the Fair Work Commission (FWC).

Verdict

The FWC found that the treating positions were redundant.

However, the FWC found that there was not a significant difference between the treating and pressing positions. Hence the pressing positions constituted suitable alternative employment and meant the employees had no entitlement to severance pay.

Lessons

Employers are able to make changes to their operations and make roles redundant.

Employees will only be entitled to severance pay if their employment finishes as a result of that change or they are not redeployed into suitable alternative employment.

What will constitute suitable alternative employment is a question of fact, but involves an examination of changes to the employee’s remuneration package, seniority, reporting structure and opportunities for progression.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.