How to tell if the termination of your employment is a “sham redundancy”

How to tell if the termination of your employment is a “sham redundancy”

If you are reading this article, no doubt it is because you have an inkling that the circumstances surrounding your so-called “redundancy” were suspicious or flat out deceptive.

Maybe the business was doing extremely well, and it just doesn’t stack up that they needed to let you go in order to “save the business.”

Maybe the “organisational re-structure” was a fallacy and no change actually occurred (other than showing you the door).

Maybe the business said they “have no alternative roles suited to your skillset” when in fact, you are more than qualified for the alternative roles, but simply were deprived of the opportunity to be considered.

There can be a variety of circumstances relating to so-called redundancies that cause you to develop a strong belief that the redundancy in your case was a sham or a rouse to disguise the “real reason” for the termination.

You are not alone.

At Rubix Legal we frequently receive enquiries from employees who have recently had their employment terminated for redundancy in circumstances where the termination was not, in truth, a redundancy.

Here is a recent case example on point.

Sham Redundancy Case example

Emma is a dedicated marketing professional who unexpectedly found herself “redundant.” Emma had been working for her employer for over 5 years, when she noticed that a particular employee was bullying a number of other staff, including herself.

Understandably concerned by the behaviour, which was a clear breach of the employer’s workplace policies, Emma reported the matter to her immediate supervisor and later submitted a written complaint to HR.

The individual complained about was well-liked by the senior staff of the employer. They had been with the business a number of years, brought in big clients and were, in essence, part of the furniture.

Emma’s complaint was not well-received by her immediate supervisor or the employer. It also appeared that the individual complained about had been notified about the complaint, which only worsened the working conditions for Emma.

Shortly after submitting her complaint, she noticed that her treatment in the workplace started to change. Her immediate supervisor became extremely critical of her performance, without just cause. She was excluded from meetings and events that she would ordinarily be a part of. There were many hushed conversations between her superiors. The friendly interactions with her manager turned frosty, and she began receiving less desirable tasks to perform. Emma felt a subtle but palpable shift in the workplace environment, sensing that her employer was not pleased about her having made a workplace bullying complaint about another worker.

Within the space of a few short weeks, Emma was summoned to a meeting with HR and her supervisor, where she was informed about the company’s decision to make her position redundant. The explanation given was a “restructuring to streamline operations and reporting lines”.

The explanation didn’t make any sense. The company had only recent completed and announced its new Strategic Plan for the business, which included confirming that no other staffing changes would be made.

Emma couldn’t shake the feeling that something was amiss.

After recovering from the initial shock that her time with the company was at an abrupt end, she reflected on what had occurred. She had made a workplace complaint about bullying and dared to call out unlawful conduct. Suddenly, out of the blue, she is told her position is redundant, without any consultation and without any opportunity to express interest in other vacant positions.  Despite the company’s official explanation for the redundancy, Emma suspected that her dismissal was a thinly veiled retaliation for her workplace complaint. She had upset the apple cart.

Emma sought prompt legal advice and learned that she had a strong case for a General Protections claim involving dismissal. The “real reason” for her dismissal was not the redundancy, but rather the fact that she had made a workplace complaint.

Armed with the right information and advice, Emma was able to negotiate a fair and reasonable settlement with her employer, and ensure she was compensated for the wrong committed against her. She received compensation for her loss of income resulting from the dismissal together with damages for the hurt, humiliation and distress the whole ordeal had caused her.

What is a sham redundancy?

In the simplest of terms, a sham redundancy occurs when an employer disguises a dismissal as a redundancy when in reality it is for another reason which is unlawful. For instance, a redundancy may be a sham where the dismissal is because an employee made a workplace complaint about something relating to their employment. A redundancy may be sham where the dismissal is because an employee injured themselves and were looking at a long road to recovery before they could return to work. A redundancy may be a sham where the dismissal is actually because the employer disliked the employee and simply wanted them “gone” so they could appoint a preferred candidate into the role.

There can be a variety of circumstances that make a redundancy a sham. Typically, it occurs where an employer is wanting to reduce their legal liability for an unfair dismissal claim by characterising the dismissal as a redundancy instead.

Signs of a sham redundancy

No genuine operational change

In order to constitute a “genuine redundancy”, your employer needs to demonstrate that your position is no longer needed because of changes in operational requirements. There needs to be some demonstrable change in operations, such as a restructuring or a reduction in staff. If your role is quickly replaced after your ‘redundancy’, it may indicate a sham redundancy.

Targeting specific employee

If you are the only employee impacted by the so-called restructure, it may suggest a hidden agenda. This is particularly relevant if you made a workplace complaint about your employment and the response to that appears to be that you are being shown the door.

Other adverse treatment

If after you make a workplace complaint, your employer starts to treat you unfavourably, pay close attention. It is prudent to note down every incident or occurrence of unfavourable treatment, with a much detail as possible. What happened. Who was there. What was said. What were the circumstances. Adverse treatment may unfold over a period of time, all building to the final point of adverse action in the form of termination of employment. The timeline is important to pay attention to.

Lack of consultation

While not a compelling argument on its own, if your employer is telling you that your position is redundant, yet they have failed to consult with you as required by law, it may be a red flag that something is amiss.

No transparency in selection criteria

Lack of transparency in the criteria used to select employees for a so-called redundancy, may suggest the process is rigged.

No consideration of redeployment

If you can prove that there were vacant positions available that you could have been suitably qualified for, yet your employer refuses to redeploy you, that may suggest your employer wants you gone at all costs. If the dismissal was truthfully a ‘genuine redundancy’ your employer would have no problem with ensuring redeployment opportunities are properly explored. A reluctance to do the right thing might indicate the process is a sham constructed to swiftly show you the way to the exit.

What can you do about a sham redundancy?

The important question is what can you do if you believe your redundancy is a sham? Is there a legal claim that can be pursued?

The common path may not be the best path

You are probably thinking that the only pathway forward is to lodge an application for unfair dismissal remedy. You may be surprised to learn however that this is not the case.

If you believe that the real reason why you were dismissed under the disguise of a redundancy was because you made a workplace complaint about your employment, you could be entitled to lodge a general protections application, seeking appropriate compensation.

The pros of a general protections claim versus an unfair dismissal claim

There can be a number of strategic reasons why you might pursue a general protections claim as opposed to an unfair dismissal claim.

First, to succeed in an unfair dismissal claim you need to prove that your dismissal was not a “genuine redundancy” as that term is defined in section 389 Fair Work Act.

This means showing that:

• Your employer still needed your job to be performed by someone;
• Your employer failed to consult with you as required by any applicable Modern Award or Enterprise Agreement; and
• Your employer failed to redeploy you into alternative vacant positions within its businesses.

A lot of employees struggle to make out the first element – that their employer still needed their job to be performed by someone. This is because, the employer has of course taken steps to try and ‘disguise’ the real reason for termination. Typically, that will mean that they don’t immediately replace you. They may even present a draft organisational chart to support the so-called re-structure. It will not be a straight forward case of pointing at a new recruit and saying “see, they got my job!” But in many ways, that is what is required when pursuing an unfair dismissal claim, to prove that your employer still needed your job to be performed.

A general protections claim does not require an employee to demonstrate that their employer no longer needed their job to be performed. Instead, the focus is on the “real reason” behind the dismissal. For example, were you made “redundant” because you made a complaint about underpayment of wages?

Second, if you pursue an unfair dismissal claim you will undoubtedly be faced with what is called a “jurisdictional objection.” This is where the employer objects to your application on the basis that you were “genuinely redundant” and therefore not a person entitled to an unfair dismissal remedy. This often means that you are required to prepare outlines of submissions and witness statements and other documents to fight the objection, before you even get to the substance of your application.

A general protections claim does not involve jurisdictional objections of this kind. It is simply a question as to what was the “real reason” for your termination – was it that your position was redundant or was it that you exercised your workplace rights in some way and your employer didn’t like it?

Third, the maximum remedy you can attain with an unfair dismissal claim is 6 months wages, less any income you have already received from your employer (for instance notice pay and redundancy pay) or potential new employer. There is seldom a pot of gold at the end of the unfair dismissal rainbow.

A general protections claim has no cap on compensation. You can claim loss of income beyond 6 months wages. You can also seek the payment of general damages for the hurt, humiliation and distress caused. You can also seek the imposition of civil penalty orders against the company and any individual employer representatives involved in the contraventions of the Fair Work Act.

How Can Rubix Legal help?

If you find yourself facing dismissal after exercising any of your workplace rights, it’s crucial to be aware that such actions may be considered a form of prohibited adverse action.

Employees in Australia are protected against adverse action, including dismissal, that is taken because of a lawful exercise of their workplace rights. If you believe your redundancy is a knee jerk reaction to you exercising your rights, you should seek prompt legal advice from our team at Rubix Legal.

We’ll help you decipher the facts, understand your options and give you clear guidance on your legal options and rights.