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UpdatesNov 18, 2011

How to comply with the modern award consultation clause when implementing redundancies

Are you sure you’re complying with all your requirements under Modern Awards?

There are so many clauses you need to be across – but it definitely pays to be as prepared as possible.

Just take the below case as an example…

By Charles Power

Are you sure you’re complying with all your requirements under Modern Awards?

There are so many clauses you need to be across – but it definitely pays to be as prepared as possible.

Just take the below case as an example…

A recent Fair Work Australia case has made it clear just how important it is to ensure that you comply with consultation clauses in Modern Awards when implementing redundancies.

In Wang and Others v Specialty Fashion Group Ltd (2011), five employees were made redundant and informed of this by their employer in June 2011. While the employer contended that the redundancies were genuine, the employees disagreed and lodged an unfair dismissal claim with Fair Work Australia (FWA).

The employees were covered by the Textile, Clothing, Footwear and Associated Industries Award, which included a consultation clause. The clause required the employer to:

In its investigation, FWA found that the only time the employees were consulted throughout the redundancy process was when they were told by their employer that the decision had already been made.

Therefore, FWA found that the redundancies were not genuine because the employer had not complied with the consultation clause in the Award and had failed to give the employees a chance to raise any issues they had with the decision.

As you can see from this case, it is imperative that you comply with all your requirements when it comes to Modern Awards.

The consultation clause in a modern award requires that if you decide to introduce any changes in your business that might have significant effects on employees, you have to give advance notice of the change to affected employees, and discuss how any adverse impact on them can be avoided.

This is particularly important when you are implementing multiple redundancies because if you do not consult affected employees, it will work against you in any unfair dismissal claim that results from the redundancies.

Here are three steps you should take to make sure you comply with the modern award consultation clause when implementing redundancies:

Step 1: Provide your employees with a letter that:

Step 2: Hold a meeting with each employee to obtain their response to the letter.

Step 3: Hold a second meeting with each employee at least 24 hours later, in which you explain your decision regarding their employment (based on the initial consultation) and confirm that decision (and the reasons for it) in writing.

For more information about modern awards and how to make sure you comply with them, keep an eye out for your next Employment Law Practical Handbook update. It’s due on your desk shortly and contains an updated version of chapter A2 Modern Awards.

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