If position no longer redundant, can you withdraw the dismissal notice and withhold termination monies?
Redundancies were increasingly prevalent through the pandemic and are now on the rise as government subsidies wind down. What are some of the concerns and questions we hear from clients…
A business recently made some positions redundant; affecting 10 employees. After the redundancy process was completed, management realised one position was still required. The affected employee had already accepted an offer of employment with another company.
In such cases, there is a presumption that the employee is required to accept the withdrawal of dismissal; otherwise the termination would be deemed a resignation by the employee with the consequential forfeiting of long service leave and redundancy pay entitlements.
So the question is… Can you withdraw notice of dismissal to an employee and withhold termination monies if a position is no longer redundant?
Industrial courts and tribunals have generally determined that notice, once given by an employer, cannot be withdrawn, except with the agreement of the employee. The reason for this is quite simple – i.e. the employee may have already obtained employment with another employer (as has happened in this instance). If the first employer could unilaterally withdraw notice, the employee could be bound by two concurrent contracts of employment. See Re Birrell v Australian National Airlines Commission  FCA 378.
If the employee does not agree to the notice being withdrawn by the employer, the original notice of dismissal will stand; and the termination seen as being ‘at the initiative of the employer’ and is not considered a resignation. The employee would be entitled to the appropriate entitlements in relation to the position becoming redundant.
Can an employee withdraw their resignation?
The same logic applies to the withdrawal of notice by an employee. The requirement for an employee to give the appropriate period of notice is to allow the business at least some time to fill the position.
If an employee could withdraw notice at any time, it could result in the replacement employee being left without a job, having already terminated their employment with a previous employer to accept the vacated position. See Gunnedah Shire Council v Grout  IRCA 694.
An exception to this is where the mental state of the employee at the time of the resignation meant the giving of notice was not considered a voluntary act.
Where does your business stand if an employee resigns in the ‘heat of the moment’?
If the resignation are unambiguous, then the business is entitled to treat it as a resignation. However, words are said by the employee “in the heat of the moment”, an industrial tribunal is likely to refer to it as “special circumstances”.
Where special circumstances arise, it may be unreasonable for the business to accept the resignation. In this circumstance, the business should allow a reasonable period of time – e.g. 24 hours – and then make further enquiries as to whether the resignation was intended.
If ‘heat of the moment’ resignations are accepted, the business runs the risk that ultimately indicates that in the “special circumstances” that existed at the time, the intention to resign was not the correct interpretation when the facts are judged objectively. See Canh K Ngo v Link Printing Pty Ltd (1999) 94 IR 375; Bernadette Minato v Palmer Corporation Limited  IRCA 316.
Can your business re-employ a person whose position was made redundant?
The re-engagement of an employee after their position was made redundant can create some issues for an employer, particularly with respect to the continuity of an employee’s entitlements.
A modern award may contain terms which recognise previous service with the same employer for the purposes of calculating an employee’s entitlements – e.g. the Manufacturing and Associated Industries and Occupations Award 2010 (cl 42.2) stipulates re-employment within six months means any unclaimed balance of paid personal/carer’s leave continues from the date of re-engagement.
Most long service leave legislation says that re-employment within three months is continuity of service for the purposes of calculating long service leave entitlements.
There is no statutory prohibition to re-employing an employee whose position was previously made redundant. However, it may create issues with respect to taxation and unfair dismissal if there is doubt the dismissal was actually a genuine redundancy – i.e. an employee may allege the job was not redundant and may be successful in claiming unfair dismissal
Your business company may have a policy which prevents re-employment of a redundant employee within a specified period of time.
Whatever the circumstance, employees are not required to repay redundancy entitlements if they are re-employed.
Is the redundancy a genuine redundancy or an unfair dismissal?
When making the position of an employee or group of employees redundant, it is important the business can prove, if challenged, that the redundancy was genuine.
The Fair Work Act (s389) defines a ‘genuine redundancy’ to mean if:
- the business no longer requires the person’s job to be performed by anyone because of changes in the operational requirements; and
- the business has complied with any obligation to consult with the employee(s) under the relevant industrial instrument.
The Fair Work Act (s389(2)) says a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
- the employer’s enterprise; or
- the enterprise of an associated entity of the employer.
Akyra’s key takeaways
- If a position that was made redundant is re-created within a short timeframe, an employee who was dismissed may claim this is evidence the job continued to exist and the termination was therefore not a case of genuine redundancy.
- An employee has 21 days after dismissal to lodge an unfair dismissal claim, although the Fair Work Commission does allow applications later than this timeframe. Consequently, a business is advised to maintain all relevant documentation in relation to any position which is made redundant.
NEED MORE INFORMATION?
Akyra can help your business to assist and support all your questions and concerns related to redundancies. Please contact Akyra on 07 3204 8830 or book a free 30-minute consultation for an obligation-free conversation.
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The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.