By Charles Power
One thing I’ve noticed quite a few subscribers asking about lately is what they need to be aware of when transferring employees to a new location.
If you have made a decision to transfer your business to a new location or are requiring employees to move locations, you will need to consult with your employees in accordance with any applicable award/enterprise agreement clause.
Transferring employees against their will can, in some contexts, result in a constructive dismissal by breaching a fundamental term of their contract.
For example, an employee may argue that the location of their employment is an essential term of their contract and a failure to abide by that term is a renunciation of the contract (i.e., a “repudiation” of the contract).
If an employee objects to being transferred, they may attempt to argue that:
- They have been dismissed (i.e., constructively) and therefore dismissed unfairly; and/or
- Their position is redundant and as a consequence they are entitled to redundancy pay.
In relation to unfair dismissal, you may seek to rely upon the “genuine redundancy” exception to unfair dismissal. In order to prove a genuine redundancy, you will need to show that:
- The employee’s position no longer exists. This will depend on the terms of an employee’s contract and, in particular, whether the location of the employee’s employment was an essential part of the employee’s position. If the location of the position is an essential term of the employment contract, then a change in location may render an employee redundant as their position no longer exists.
- You have consulted with the employee in accordance with any applicable award/agreement.
- It was not reasonable to redeploy the employee to another position.
In relation to redundancy, if the employee’s position no longer exists then the employee may be entitled to redundancy pay in accordance with an applicable agreement, the National Employment Standards, or a contract of employment.
As discussed above, this mainly depends upon whether the location of the employee’s employment is an essential part of the employee’s position.
Obviously a good way to secure employee agreement to the change is to offer some kind of relocation package, such as a one-off compensation payment or a car allowance for a 6 month transition period, in order to mitigate the extra expense and inconvenience presented by the new work location.
Stay tuned for Friday’s Bulletin.
I’ll go over the 7 things you must do when consulting with employees about major workplace change.