Redundancy and adverse action

When a redundancy isn’t a redundancy: How the courts look into the mind of decision makers

The recent decision of the Federal Court of Australia in National Tertiary Education Union and Bessant v Royal Melbourne Institute of Technology [2013] FCA 451 provides useful insights into how the courts will look into the mind of decision makers to ascertain the “true” and comprehensive reasons for any decision. It shows the importance of ensuring that clear and unequivocal evidence is given by a decision maker regarding the entire scope of the reasons for the decision.

Failing to ask the question?

Professor Bessant was dismissed from her position as a Professor of RMIT purportedly on the basis that her position was redundant. Professor Bessant claimed that there was no genuine redundancy and the dismissal amounted to taking “adverse action” against her for reasons that included the exercise or proposed exercise of her workplace rights. Professor Bessant also alleged a breach of RMIT’s enterprise agreement. The “workplace rights” alleged by Professor Bessant arose from the long and troubled history between the parties, including a number of complaints or enquiries Professor Bessant had made regarding RMIT. These complaints included allegations of bullying against the head of the relevant School, Professor Hayward and complaints regarding breaches of RMIT’s enterprise agreement.

Under the relevant provisions of the Fair Work Act 2009 (Cth), once an applicant has established the existence of adverse action and a workplace right, the onus shifts to the respondent (in this case RMIT) to establish that the reasons for the action did not include the prohibited reasons.

RMIT’s position was that the Vice-Chancellor of RMIT, Professor Gardner was the sole person responsible for the decision to dismiss Professor Bessant. While Professor Gardiner was called to give evidence, she was not asked and did not give evidence that any of the reasons alleged by Professor Bessant were not reasons for the decision.
RMIT took the view that it discharged its onus by Professor Gardner’s positive testimony regarding the reasons for the dismissal relating to financial reasons. However, Justice Gray found that this was insufficient where the reasons for dismissal may be manifold finding:

Even if the reasons advanced as actual reasons for the decision are accepted as such, the absence of evidence that there were no additional reasons, or that the actual reasons did not include the alleged proscribed reasons, will usually result in a failure to rebut the presumption.

Justice Gray went on to find that Professor Gardner’s evidence:

[was not] inconsistent with the possibility that Professor Gardner was motivated by reasons other than the purely financial ones she asserted.

This conclusion was strengthened by documents which listed that the reasons for the decision were “largely” or “primarily” financial and listed “central” reasons-opening the door to the conclusion that the other reasons related to the prohibited grounds asserted by Professor Bessant.

Redundancy as a tool to remove a troublesome employee?

Justice Gray found that the genesis of Professor Bessant’s dismissal arose from a decision of Professor Hayward that her position was “untenable” and there were two options to resolve this issue.

The documents prepared at the time showed that the position held by Professor Bessant was ‘targeted’ for redundancy, no criteria for determining what positions would be made redundant were developed, there was no information regarding how Professor Bessant was assessed in relation to any such criteria and a change in Professor Bessant’s role to a research only position was not properly taken into account. There was also what Justice Gray categorised as a “disturbing” absence of any contemporaneous account of the reasons of Professor Gardner for deciding that Professor Bessant’s position was redundant.

As a result Justice Gray determined that RMIT had failed to discharge its onus that the reasons for Professor Bessant’s dismissal did not include the prohibited reasons concluding that:

In effect, RMIT made use of its redundancy process to rid itself of an employee, who was considered to be troublesome, at least partly because she was prepared to exercise her workplace rights by making complaints about the behaviour of her immediate supervisor.

Justice Gray also found that the redundancy process breached RMIT’s enterprise agreement. RMIT was ordered to pay a total of $37,000 in penalties (payable to the NTEU) and to reinstate Professor Bessant with recognition of continuity of employment up to the date of reinstatement for the purposes of remuneration and other entitlements. No order was made in respect of costs.

Implications for employers

This case demonstrates the importance of properly documenting the reasons for any decision, ensuring that clear and comprehensive evidence is available if required. It also reminds employers of the dangers of using a targeted ‘redundancy’ program as an alternative to performance management.



This article is written by Jane Wright, Director and Principal of Workdynamic Australia. The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.