Consultation - this word tended to be be knocked around a lot last year, especially in relation to mandating the Covid vaccine within workplaces. But how many of us truly understand its meaning in regards to overall major workplace changes and decision making?
Do you really need to use the consultation process when making major changes within your place of work? Although not clear cut, if in doubt the advice is normally yes!
An example of this was the aviation company in August 2021 that decided to change the roster without first going through the consultation process with its employees or checking the requirements of the Enterprise Agreement. For their trouble they were fined $72,500 in line with breaching the Enterprise Agreement consultation clause.
So what is defined as a major change?
A major change requiring consultation is defined as ''a change that will have significant impact on more than one employee, on job security or promotion opportunities''. These instances will require consultation and
Where an organisation ''makes a definite decision to introduce major changes in production, program, organisation, structure or technology in relation to its enterprise''.
Be aware of the relevant modern award, as these also require employers to consult about changes to regular rosters or ordinary hours of work.
As per the FairWork Act an employer is obliged to consult when a decision is made that has significant affect on the status, pay or location of a parental leave employee's pre-parental leave position.
Further information around redundancies and consultation obligations from the FairWork Commission are available here.
When major changes include genuine redundancies it is imperative to follow the consultation process as outlined in the EBA, National Employment Standards or Modern award. Holding a redundancy consultation is a precautionary measure you should take to ensure your organisation is not subject to unfair dismissal claims under Australian law. Some steps to follow could include:
Consult with staff and announce any changes including individual meetings and redeployment opportunities (if relevant).
Confirm redundancies and alternative positions. This step should also include notice period and entitlements in line with the modern award and National Employment Standards.
Draft Redundancy or Redeployment letters.
Arrange individual consultation meetings with employees.
Provide employee with final letter.
Although some genuine redundancies don't constitute as a major change, and therefore don't require consultation as in Health Services Union v Healthscope Operations Pty Ltd. These cases should be regarded as more of an exception to the rule, than common practice.
Highlighting the need to follow the consultation process is the case of Cruise v Baxter Cassidy Pty Ltd T/A Ray White Langwarrin [2019] FWC 1751, where the FairWork Commission found that an employer's failure to consult with an employee caused the dismissal to be unfair and not a genuine redundancy.
The employee was employed as a part-time Assistant Property Manager for the past 3 years.
On the 3rd August 2018, the employer made the decision that the business required the role of Assistant Property Manager to be performed on a full-time basis.
Consultation Process and Termination
Over a 2 week period the employer met with the employee and advised her of its decision and offered her the full-time role which would pay $5 less an hour and have no commission payments.
This was then followed up by an email from the employer which set out the proposed hours of work and salary for the full-time role and requested a response by the 10th August.
On the 8th August the employee requested further information and an extension to make a decision, with no response. She then requested this information again and was not responded to.
On the 24th August 2018 the employer met with the employee and advised her that she had been given an opportunity to consider the full-time role but had not accepted it and so her employment would be terminated as a result of a redundancy, and provided her with a termination letter.
The employee then lodged an unfair dismissal claim and alleged her employer did not comply with the genuine redundancy consultation obligations, and the full-time proposal was to force her hand to resign, given she would not be able to fulfil the role with her family responsibilities, which her employer was aware of.
The employer objected stating among many things that this was a genuine redundancy.
Commission Findings
The FairWork Commission stated: “The evidence indicates instead that after sending the outline to her on 7 August the business did not realistically engage with her again until the brief discussion on 24 August when Ms Cruise was told her employment was to be terminated with immediate effect.”
The Commission found the employer did not comply with its obligations to consult with the employee under the Real Estate Award 2010, because the employer did not provide the relevant details to the employee about the major change or discuss the affect those changes were likely to have.
The Commission considered this was particularly important in this case, and the employer knew about the employee's family and carer responsibilities. Job sharing with another employee or similar might also have been canvassed as a way of consultation.
The Commission also noted the significance of the failure to respond by the employer to the employee's 8th August email and lack of consideration of redeployment opportunities for the employee, and noted the employer did not realistically engage with the employee until the brief discussion on the 24th August when the employee was told her employment was terminated with immediate effect.
For all these reasons the FairWork Commission dismissed the employer's jurisdictional objection and found the employee's dismissal to be unfair and the employer was ordered to pay $14,578.11 in compensation to the employee.
Considering consultation
If you find yourself in a situation where you need to instigate the consultation process, below are a few tips to consider at the outset:
Ensure you have read through the relevant consultation provision(s) and understand what is required.
Be clear about which group of employees need to be consulted, does the clause include employees who are indirectly affected? Is health and safety involved, if so ensure health and safety representatives are included.
Does a union representative need to be involved?
Plan what the consultation process will look like for your business. It's also a good idea to offer different mediums for feedback.
If your particular situation is tricky always seek professional advice.
Once you start the consultation process try to keep the mindset of ''we are thinking of making this change and would like to know what you think'', rather than ''this is the change we are making''.
General consultation process (these are some general steps as some situations will vary according to the circumstances and specific legal consultation requirements)
Provide relevant information to the employee(s) about the proposed change.
Give the employee(s) the opportunity to present their views in response to the information .
Ensure a genuine consideration of the views of the employee(s) is taken into account prior to a final decision and implementation.
Bear in mind a right to be consulted is not a right of ''veto'' in relation to the decision. The views of the employee(s) need to genuinely be considered, but do not have to be adopted.
If you would like to know more around navigating employment changes and the consultation process, contact one of our local coaches!
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