ANZ Bank Australia recently announced plans to cut 3500 staff and 1000 contractors in the next 12 months as part of major changes intended to ‘simplify the bank’. In formally announcing the plan CEO, Nuno Matos, acknowledged this would be “difficult news for some of our staff”.
Unfortunately, ANZ also had to apologise to some staff who found out they had been fired through an automated email asking them to hand back their laptops. ANZ said the emails were sent in error to some staff ahead of schedule. ANZ's retail banking executive Bruce Rush said it was "not our intention to share such sensitive news with you in this way". It said it has since stopped sending the emails and that staff have been spoken to personally.
The Financial Sector Union president Wendy Streets said "speed and cost-cutting cannot come at the expense of dignity and respect for workers," describing the "botched" episode as "disgusting".
However, the timing of the Bank’s announcement comes shortly after a significant ruling on redundancy and the option of redeployment from Australia’s highest court – modestly named the High Court.
The starting point under Australian employment law is that a “genuine redundancy” is a complete defence to an unfair dismissal claim. But it requires the employer to show that the affected employee’s role is no longer required to be performed by anyone, that it has consulted with the employee in accordance with any obligations under an applicable industrial instrument, and it would not have been reasonable in all the circumstances for the employee to be redeployed within the employer’s business. Prior to the new ruling, it was considered that employers were only required to consider suitable vacant roles as redeployment options for employees who they intended to make redundant.
In Helensburgh Coal Pty Ltd v Bartley & Ors the company contended that the Fair Work Commission is not permitted to consider possible changes to the ways in which an employer conducts its enterprise, including the option of replacing contractors with employees. It claimed that the Fair Work Commission cannot substitute its own view in place of the employer’s view on the matter, which it said is consistent with other aspects of Australia’s unfair dismissal regime where the Commission does not “stand in the shoes” of the employer to determine what it would have done if it were in the employer’s position.
The High Court of Australia disagreed and unanimously held, that the Commission is permitted to engage in a broad inquiry when determining whether an employer could have made changes to the way in which the employer used its workforce when determining whether a redundancy is genuine for the purposes of Fair Work Act. Before making a decision to dismiss employees on grounds of redundancy, employers must now consider all possible redeployment options, including whether redeployment in roles currently occupied by other workers, including contractors or workers engaged through labour hire and other outsourcing arrangements, would have been reasonable.
Traditionally, New Zealand courts have taken the view that whether a position is truly redundant is a matter of business judgment for the employer. The courts have been careful not to substitute their own opinions for that of the employer. That position has changed somewhat since the statutory test for justification was introduced by the Employment Relations Act.
Since 2010 it is accepted that, where possible, an employer should offer alternative employment to an employee whose position might be redundant. For example, in Wang v Hamilton Multicultural Services Trust the Employment Court held that the employer had a duty to offer appointment to an alternative position if the employee was capable of performing the role, even though that employee might not have been the best person for the job.
Redeployment may also need to look at other options in appropriate circumstance. For example with international entities, consideration may need to be given to work available outside of New Zealand. In Stellar Elements NZ v Annesbury, the Employment Court granted interim reinstatement when it considered that the interconnectedness of staff was demonstrated by the assortment of New Zealand and Australian staff with relevant reporting lines and the employee’s work was not confined to New Zealand.
It will be interesting to see if our employment institutions take notice of the High Court of Australia’s ruling including whether employers should reasonably consider redeployment into roles currently filled by other workers such as contractors or workers engaged through labour hire and other outsourcing arrangements.
And while ANZ Bank Australia plans to cut staff includes contractors, it may have a harder time justifying resulting dismissals as these multi-national banks operate in various jurisdictions with region wide reporting lines with complex resourcing arrangements including contracting, secondments and use of labour hire companies. Read more....