Enterprise agreements will commonly regulate the way employers need to handle termination of employment and disciplinary matters. The Fair Work Commission (FWC) recently dealt with disputes in relation to these enterprise agreement clauses in two cases.

Decision #1

In CEPU v Australian Paper (2023), the FWC was asked to resolve a dispute about the operation of an enterprise agreement clause that prohibited retrenchment of employees during the term of the agreement, except in certain defined circumstances.

The dispute arose when a pulp and paper mill decided to implement voluntary redundancies following a court order prohibiting logging. The employer wrote to relevant employees to set out the “formal notice of the termination of your employment on the grounds of redundancy”. The letters stated the employer would provide employees with instructions regarding duties to be performed during the notice period.

The FWC stated that employees who volunteer for redundancy express their wish for the employer to terminate their employment for reason of redundancy. They do so because the employer has initiated a redundancy process and they want to receive the benefits that will be paid to them when they are retrenched. They do not resign.

In this case, the FWC considered the employees were dismissed, despite this being on a voluntary basis. However, the FWC ruled the employer did not breach the clause because allowing voluntary redundancies enhanced the job security of those who wished to retain their jobs. The volunteer’s job security is not at issue because they wish to be retrenched.

Decision #2

In Kumar v Opal Packaging Australia (2023), the FWC ruled that the failure of the employer to follow its enterprise agreement disciplinary procedure was a factor making the dismissal of an employee for a ‘lock out, tag out’ breach unfair.

The FWC was also critical of the fact that the employer, which has a workforce of around 3,500 employees, did not have a specific policy or procedure in relation to the investigation of such breaches. The absence of a policy resulted in the employer being unable to verify through direct evidence whether the employee had committed the breach. The employer relied upon previous breaches to assess the likelihood of the employee engaging in the alleged breach. It did so without advising the employee of this or providing him with an opportunity to respond.

The FWC concluded that where an employer is substantial, and has dedicated human resources personnel and access to legal advice, there will likely be no reason for it not to follow fair procedures. Given the employer’s size and the fact that it employed a dedicated workplace relations specialist who conducts workplace investigations into allegations of workplace misconduct, the FWC found the deficiencies in the procedures followed in effecting the dismissal weighed in favour of a finding that the dismissal was unfair.