When faced with a performance management situation, an employee who is performing poorly or who does not demonstrate the relevant expertise or behaviours, it can be very tempting to consider making the person redundant.  A redundancy means that the person can be terminated quite rapidly, cannot take unfair dismissal action, and they are paid an attractive amount of money to induce them happier to leave.  While this may be superficially appealing, there are a number of traps and pitfalls for schools which can prove costly.

Impact on staff and the school

When first considering the possibility of redundancy, considerable thought must be given to the fallout from the process. Once redundancies are mentioned many staff members may feel unsettled. Some may start to look for jobs straight away, while others will just worry, and almost all will start to talk about it. All of these activities are normal human reactions but all of them take away from fulfilling the school’s educational mission.

Communication by the Principal must be clear and regular to all staff members, not just those affected, to ensure that staff fears are allayed as far as possible so that everyone can get on with the job (or their next job) with the least amount of distraction.

How a school handles a potentially traumatic event such as redundancy is a key indicator to staff of how the school views and values them.

Is it a genuine redundancy?

The first hurdle to negotiate when considering making someone redundant is whether it is a genuine redundancy. For most schools, a redundancy as provided for by the Fair Work Act 2009 occurs when:

(a)  the school no longer requires the person's job to be performed by anyone because of changes in the school’s operational requirements; and

(b) where it is not reasonable in all the circumstances for the person to be redeployed within the school or an associated entity of the school.

It is still a redundancy if the work has to be performed, but the tasks are absorbed over a number of people, and the specific position no longer exists. It is not a redundancy if their job is later performed by another person, even if the person is vastly superior in the quality of their work. If you are contemplating replacing the old position with a new position that has most of the tasks of the old position but adds some new ones and a higher salary, you are likely to be in a high risk situation which may benefit from seeing an employment lawyer.

The risk of making a person redundant where it is not a genuine redundancy is that the person may turn to the Fair Work Commission. If the Commission finds that it was not a genuine redundancy, and that the school did not follow the required procedures to ensure that it was a fair dismissal, the employee could be awarded  compensation (reinstatement or up to 6 months pay) and he or she could hold on to their severance pay. Or worse, the employee can make an adverse action claim under the Fair Work Act 2009 and allege that he or she was made redundant for a prohibited reason, such as claiming workplace rights like personal carer’s leave (even if excessive), or work as a union delegate. Adverse action claims do not have a real cap on compensation payable to a claimant, with the largest payout at the moment being in the vicinity of $1.3 million.

Of course, there will be situations where an employee faced with the trauma and humiliation of being performance managed will welcome the dignified approach of a redundancy and /or its financial benefits.  Once again an employment lawyer will be able to advise on the wording of an appropriate agreement to finalise the termination and avoid further repercussions.

Do we need to consult?

If we assume that the redundancy is actually genuine, the second key hurdle is to manage the consultation requirements.

The Fair Work Act 2009 in specifying how to deal with redundancies contains a further condition: for a redundancy to be genuine the employer must have complied with any obligation in a modern award or enterprise agreement to consult about redundancies. A similar consultation requirement exists for those schools in Western Australia which do not come under the Act (usually schools which are incorporated associations) but under the WA General Termination Order. Failure to comply with these requirements means that the termination will slip back into a risk of unfair dismissal. It is important for the consultation requirements to be followed to the letter with records of all that has taken place as evidence of compliance.

Consultation requirements may distinguish between redundancies due to “technological change” and all other circumstances. The “technological change” is a throwback to the major redundancies which resulted from the introduction of computers, and the redundancy provisions were usually more generous than for other circumstances.

It is likely that most redundancy situations in schools will not come under this heading so the procedures are likely to be set out in the enterprise agreement. The most common versions require consultation with affected employees and their representatives before a final decision is made as to who is to be made redundant. This is very important and is designed to provide all parties to discuss the operational reasons and to explore other options other than terminating employees.

The school will need to be prepared at this initial meeting to provide information on why the redundancies are being considered. Some commercial in confidence information may be withheld, although that may not be helpful in reaching an understanding. The school will also need to be prepared to consider and discuss other vacancies the person can be redeployed into, including lower level jobs, or reduced hours, or retraining.

Where it is not immediately obvious why a particular position has become redundant, for example if one teaching position in the Science Department is to go, rather than the school will no longer have a school nurse, the school should also be prepared to explain their methodology in how staff will be selected for that position. Consideration should be given to clear criteria that do not include the potential for claims of unlawful discrimination.

At this meeting the school should provide the employees and their representatives with an opportunity to come back with options or matters for further consideration, at a date to be determined (this need not be more than a week in most cases). No final decision (or announcements) should be made until any matters raised as a result of this consultation have been given reasonable consideration by the school. This does not mean that the school must agree, only that it consider. The school should then communicate directly to those with whom they consulted explaining  their response to any of the matters raised by the employees and their representatives and the final outcome.

Even where the enterprise agreement does not provide any specific conditions relating to redundancy, such a consultation process should be followed as a minimum, to provide a fair process for affected employees. It is always possible that through consultation alternative solutions may be found to avoid the potential trauma of forced redundancies – sometimes people may be planning to retire and they can leave instead of someone who does not want to leave. Asking for volunteers may be another option although you will have to take steps not to lose your best people this way. Offering some staff members reduced hours may be something they would be keen to do, and this way it could lower the full-time employee numbers.

Summary

As can be seen, the redundancy process should not be entered into lightly. Disgruntled staff, costly legal action, and distraction from teaching students can all result from a poorly managed process.