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Excerpt from this article first published in Human Resources Magazine, Issue 127 - 1 May 2007
A nursing home in South Australia has failed in its bid to stop an unfair dismissal application on the basis that the employee was dismissed for operational reasons of a structural nature.
The Workplace Relations Act says that an employee dismissed for the reason or for reasons that include the reason of genuine operational reasons of an economic, technological, structural or similar nature is excluded from the unfair dismissal jurisdiction.
In the case Jane Owens & Whyalla Aged Care Incorporated, the Australian Industrial Relations Commission held that Ms Owens had been dismissed for misconduct, not for operational reasons as contended by her former employer. Ms Owens had been employed in the position of Manager Community Services at the employer's Whyalla facility. Another employee at the Whyalla facility alleged that she had been bullied.
The employer conducted an investigation of the allegations during which Ms Owens was stood down on full pay. She was provided with a copy of the complaint and was requested to provide a response. Ms Owens then attended a further disciplinary interview during which the allegations were discussed and Ms Owens was provided with an opportunity to respond. The employer then contended that it considered all of the evidence and the employer's operational requirements in deciding to terminate Ms Owens' employment.
The employer contended that Ms Owens' dismissal was for operational reasons because it had to consider its existing management structure to determine whether it could accommodate Ms Owens within that structure. The employer submitted that the alleged victim of the bullying had already resigned and, if Ms Owens had retained her position of Manager Community Services, it was likely that there would be further losses of staff. Therefore, the employer contended, Ms Owens' termination was for an operational reason of a structural nature. The employer also contended that as it had to take into account the occupational health and safety of its other employees, the continuation of Ms Owens' employment would have been unworkable.
In rejection the employer's submission, the Commission observed that only reasons of an economic, technological, structural or similar nature are operational reasons for the purposes of the relevant provisions of the Act. It also agreed that whether the employer could have done something other than terminating the employee's employment (such as transferring the employee) will generally be irrelevant in deciding whether the termination was for genuine operational reasons, or for reasons that include genuine operational reasons. The Commission went on to find the true and genuine reason for the termination of Ms Owens' employment was exclusively misconduct comprised of alleged bullying behaviour and misconduct is not a genuine operational reason within the meaning of the Act. The Commission also concluded "the behaviour of an individual employee, particularly in the context of it being a reason for the termination of that employee's employment, is unique to that individual. Generally it has nothing to do with the economics, technology or the structure of an organisation".
In the above decision, the Commission referred to explanatory notes and speeches made in Parliament where the operational reasons exclusion from the unfair dismissal jurisdiction was most commonly linked to a situation of redundancy, that is, where the employer no longer requires a job to be performed.
The above case illustrates that it is necessary to have clear objective reasons to terminate an employee's employment. The unfair dismissal jurisdiction cannot be avoided by calling a termination for reasons of misconduct or poor performance, a termination for reasons of redundancy if the employee's former position is still required to be performed by the employer.
