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Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 108, 11 July 2006
The Australian Industrial Relations Commission (AIRC) ruled that it had no jurisdiction to hear an unfair dismissal claim by a former employee because the employee was dismissed for genuine operational reasons.
The former employee, Mr Koya, was employed as the Chief Technical Officer in Port City Council’s Information Management Group (IMG).
Following a number of complaints, the Council engaged a consultant to provide a report about IMG’s delivery of services. The report found a number of weaknesses and recommended that the IMG be reviewed.
As a result of the review a number of former positions were abolished including Mr Koya’s. Council offered him other comparable positions but he declined. Mr Koya was paid all redundancy entitlements.
In determining that he did not have jurisdiction to hear the unfair dismissal claim, Deputy Present Ives noted the changes made to the Workplace Relations Act 1996 following passage of the Work Choices amendments on 27 March 2006. Under those amendments an employee who is terminated for reasons that include genuine operational reasons may not pursue an unfair dismissal claim in the AIRC. Operational reasons are defined as “reasons of an economic, technological, structural or similar nature relating to the employer’s undertaking, establishment, service or business, or to a part of the employer’s undertaking, establishment, service or business”.
DP Ives concluded that the restructure was genuine and was not a ‘sham’ or a ‘set up’ as Mr Koya contended. The Deputy President referred to evidence of the process of extensive consultation and review.
HR Tip
Although genuine operational reasons may be relied on in asserting the AIRC has no jurisdiction to hear a former employee’s unfair dismissal claim, the operational reasons must be genuine.
If called on to do so, the employer must demonstrate that at least one of (if not the only) reasons for terminating the employee’s employment was because economic, technological, structural or similar reasons prompted the employer to change its undertaking, establishment, service or business. It may still be necessary for employers to demonstrate that they have consulted widely and have taken relevant factors into account.
Gordon Jervis, Senior Associate
