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National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) FCA 451

National Tertiary Education Union v RMIT

Background

Professor Bessant was a Professor in Youth Studies and Sociology at the RMIT. She had intended to exercise a workplace right by complaining to RMIT Management and WorkSafe Victoria regarding bullying and intimidation at the RMIT School, and as a result she had a falling out with the Head of the School after he became aware of the complaints.

Professor Bessant was dismissed on the grounds of redundancy due to purported financial constraints within RMIT and the teaching school.

The NTEU commenced proceedings on behalf of Professor Bessant under section 340(1)(a)(ii) of the Fair Work Act 2009 in the Fair Work Commission and on failing to settle the matter at conciliation took the matter to the Federal Court before Justice Peter Gray.

The remedy sought was reinstatement or compensation, compensation was argued to be in the order of $1m to $109m.

The Decision

Justice Gray on hearing the evidence determined that the redundancy was a sham and was done for the purpose of 'getting rid of an undesired employee', and ordered that the Professor be reinstated and RMIT pay fines of $37,000 to the NTEU.

He determined that RMIT had failed to prove that the decision to terminate Professor Bessant was soley due to redundancy, and he also accepted the argument put by the NTEU that the reason for her termination was an adverse action as a result of her exercising a workplace right.

He also considered that there was no clear link or connection between the decision to terminate Professor Bessant and the financial situation in the School as put forward as the reason for termination on the grounds of redundancy.

The Judge said that there was a need for general deterrence to discourgae employers from using 'redundancy' as a way to dismiss employees. In this case there was a breach of the Fair Work Act 2009 and the relevant enterprise agreement and both breaches formed the basis of the penalty imposed.

This means ...

The days of employers relying on a redundancy as a way to dismiss an employee and avoid the consequences of an unfair dismissal claim are over, and sham redundancies are a risky business. There are serious risks of serious financial penalties under the adverse action - general protections laws of the Fair Work Act 2009. To do so may breach an employees right to exercise a workplace right and lead to reinstatement and significant financial penalties.

Prior to terminating an employee on the basis of redundancy it is essential to seek advice on whether or not the situation is a true redundancy, whether or not proper notice and consultation has occurred and whether or not re-deployment has been seriously and effectively considered.