The term “consultation” gained significant attention last year, particularly regarding the mandating of COVID-19 vaccines in workplaces. However, many employers may not fully grasp its importance in relation to broader workplace changes and decision-making.
Is the consultation process necessary when implementing major changes in your workplace? While the answer may not always be straightforward, it is generally advisable to proceed with consultation.
A notable example is an aviation company in August 2021 that altered its roster without consulting employees or reviewing the Enterprise Agreement requirements. This mistake resulted in a $72,500 fine for breaching the consultation clause in the Enterprise Agreement.
Identifying What Constitutes a Major Workplace Change
- Defining Significant Changes
A major change necessitating consultation is defined as “a change that significantly impacts more than one employee, particularly concerning job security or promotion opportunities.” Such scenarios require consultation.
- Recognising Organisational Decisions
Consultation is required when a company “makes a definitive decision to introduce major changes in production, programs, organisation, structure, or technology.”
- Considering Employment Awards
Be aware of the relevant modern award, as many of these require employers to consult on changes to regular rosters or ordinary working hours.
- Special Provisions for Parental Leave
The Fair Work Act obliges employers to consult when a decision significantly affects the status, pay, or location of an employee’s role before or after parental leave.
For more details on redundancies and consultation obligations, you can refer to the Fair Work Commission’s guidelines.
Managing Redundancies Through Proper Consultation
When significant changes involve genuine redundancies, it is crucial to follow the consultation process as outlined in the Enterprise Bargaining Agreement (EBA), National Employment Standards, or Modern Award. Conducting a redundancy consultation is a vital step to prevent unfair dismissal claims under Australian law. Important steps include:
- Initial Discussions with Employees
Engage with staff to announce any changes, including individual meetings and potential redeployment opportunities (if applicable).
- Confirming Redundancy Decisions
Confirm redundancies and explore alternative positions, ensuring that notice periods and entitlements comply with the Modern Award and National Employment Standards.
- Drafting Necessary Documentation
Prepare redundancy or redeployment letters as required.
- Scheduling Individual Meetings
Arrange one-on-one consultation meetings with impacted employees.
- Providing Final Communication
Deliver the final letters to the affected employees.
While not all genuine redundancies are considered major changes requiring consultation, such cases should be viewed as exceptions rather than the norm.
Case Study: The Importance of Following Consultation Protocols
The case of Cruise v Baxter Cassidy Pty Ltd T/A Ray White Langwarrin [2019] FWC 1751 underscores the necessity of adhering to the consultation process. Below is a summary:
- Background of the Case
An employee served as a part-time Assistant Property Manager for three years. On 3 August 2018, the employer decided to convert the role to a full-time position, offering a $5 hourly pay cut and no commission.
- Issues in the Consultation Process
The employer met with the employee, offered the new role, and requested a response by 10 August. The employee asked for more information and an extension but received no reply. On 24 August, the employer informed the employee that her employment was terminated due to redundancy.
- Commission’s Findings
The Fair Work Commission determined that the employer failed to meet its consultation obligations under the Real Estate Award 2010, especially given the employee’s family and carer responsibilities. The employer’s lack of response to the employee’s inquiries and failure to consider redeployment options contributed to the Commission’s ruling that the dismissal was unfair. The employee was awarded $14,578.11 in compensation.
Key Considerations for Employers During Consultation
If you find yourself needing to initiate the consultation process, keep these steps in mind:
- Review Consultation Requirements
Ensure you’ve thoroughly reviewed the relevant consultation provisions and understand the necessary steps.
- Identify the Affected Employees
Determine which employees must be consulted, including those indirectly affected, and consider whether health and safety representatives need to be involved.
- Involve Union Representatives
If applicable, include union representatives in the consultation process.
- Plan the Consultation Process
Design a consultation process tailored to your business and offer various feedback channels to employees.
- Seek Professional Guidance
If the situation is complex, it’s advisable to seek professional advice.
Throughout the consultation process, adopt the mindset of “we are considering making this change and would like your input,” rather than “this is the change we are implementing.”
General Steps in the Consultation Process
Below are general steps for the consultation process, though specific legal requirements may vary depending on the situation:
- Share Relevant Information
Provide employees with detailed information about the proposed changes.
- Encourage Employee Feedback
Offer employees the opportunity to present their views in response to the proposed changes.
- Consider Employee Feedback
Genuinely consider employees’ views before making a final decision and implementing changes.
- Understand Consultation Limits
Remember, consultation does not grant employees a “veto” over decisions. While their views must be considered, they are not required to be adopted.
If you need more guidance on navigating workplace changes and the consultation process, reach out to one of our local coaches for assistance!