restructures, redundancies and transfer of business: getting it right
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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
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> 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
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> 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:[email protected]
Abbey SuttonAssociatePh: (03) 8640 2312E: [email protected]
For more information about the services offered by Russell Kennedy, please visit us at www.rk.com.au