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Restructures, redundancies and transfer of business: Getting it Right

Anthony Massaro, PrincipalAbbey Sutton, Associate

30 March 2016

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> Managing redundancies> Minimising the risks> Redundancy payments

> Transfer of business> What are the rules?> What do you need to consider?

Implementing workplace change

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Managing redundancies

> When an employer no longer requires the job done by an employee to be done by anyone, due to changes to operational requirements

What is redundancy?

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> Introduction of new technology> Organisational restructure> Downsizing/closure/liquidation> Transmission or transfer of business> Outsourcing> Relocation

Causes of redundancy

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> Unfair dismissal> General protections or discrimination> Failure to comply with award or

enterprise agreement> Disputes and grievances> Injunctions

What are the risks?

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> Consultation> Why consult?> What does it involve?> How much is necessary?

Minimising the risks

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> Redeployment> Are there any vacancies?

> What is the nature of the available position?

> What qualifications are required to perform the job?

> What are the employee’s skills, qualifications and experience?

> Where is the job located?

Minimising the risks (cont.)

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> Notice of termination> Notify Centrelink> Voluntary redundancies

Other procedural considerations

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> How much redundancy pay?> Small business> Application to vary> Transfer of business

Redundancy payouts

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> Is the employee is covered by an enterprise agreement or modern award?

> What are your consultation and redeployment obligations?

> Communicate the redundancy at the right time.

> If communication might be delayed, or there will be mass redundancies, seek legal advice.

> Ensure consultation and the consideration of redeployment options is genuine.

> Establish a fair set of selection criteria if applicable.

Tips

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Transfer of business

> There is a transfer of business for an employee if:> They finish employment with one

employer, then start with another within 3 months

> They perform substantially the same work

> There is a “connection” between the two employers

What is a transfer of business?

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Several categories of connection> Arrangement for transfer of assets used

in connection with work> Outsourcing> Insourcing> Associated entities

What is a connection?

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It does not matter how the termination comes about, or when the business actually transfers> Resignation> Dismissal for conduct/performance> End of fixed term role> Casuals

Within 3 months of termination

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> Enterprise agreement applies to transferring employees> (and some non-transferring employees)

> Continuity of service> Transfer of service based entitlements> Annual leave

Effects of a transfer (1)

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> Exception from redundancy payments> Employment contracts do not transfer> Employment records transfer

Effects of a transfer (2)

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The Commission may make orders:> that agreement does not transfer> that agreement does not apply to non-

transferring employees> to vary a transferring agreement

> remove terms which no longer work> improve alignment with new employer

FWC involvement

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> Aim for transfer of all employees> with continuity of service> and offers on no less favourable terms

> If not, compensation for redundancies> Get offers made as soon as possible> Limit scope of adjustments for

transferring entitlements> Retention bonus for key staff

Tips for transferors

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> Know what you are getting into> Due diligence

> Get an adjustment for transferring entitlements

> Aim for flexibility in which employees transfer

> Consider an application to FWC > Avoid unlawful discrimination

Tips for transferees

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> Initial consultation meeting> Get the new employer to attend

> Follow up letter> Communicate with new employer> Further meetings and correspondence

to discuss process and entitlements> Offers of employment to come before

notice of termination is given

Example process

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> When implementing workplace change consultation is key

> The transfer of business rules can sneak up on you, with lasting consequences

Key messages

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Contact details

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Anthony MassaroPrincipalPh: (03) 9609 1501E:amassaro@rk.com.au

Abbey SuttonAssociatePh: (03) 8640 2312E: asutton@rk.com.au

For more information about the services offered by Russell Kennedy, please visit us at www.rk.com.au