Redundancy Unravels

Employers who bypass performance management and make employees redundant can come completely undone. 

These redundancies are not genuine and can make way for a successful Unfair Dismissal claim. In these circumstances employers often use their cheque books to help get them off the hook.

The recent decision of Paramore v Knight Watch Security (trading as Bluestar Security Services) highlighted what a costly exercise sham redundancies can be.

In this matter Knight Watch Security made a Mr. Paramore, senior manager, redundant as part of a ‘restructure’ as he was considered an underperformer.  Mr. Paramore’s colleague in Victoria was also made redundant.

Just one day later, Bluestar employed a new general manager in NSW who’s duties included those previously performed by the two managers in NSW and Victoria who had just been made redundant.

Mr. Paramore was not considered for the new position despite the fact that he had the skills and experience needed.  The Director told Mr. Paramore that he was not dismissed due to his performance and stated that “I wasn’t getting……a return on my investment. I couldn’t communicate, the relationship was coming to that breaking point between us”.

Deputy President Dean found that in the circumstances Bluestar should have considered him for the new position, as he had the skills for the new role.

Deputy President Dean considered that the organization could have redeployed Mr. Paramore and not made him redundant and the dismissal was unfair.

Bluestar argued it had raised issues about Mr. Paramore not “living up to expectations” to him in person and in writing. The Deputy Register did not accept that Mr. Paramore was told clearly in no uncertain terms that his job was at risk if he did not address the issues raised about him.

Deputy President Dean identified that the relationship was broken down beyond repair, and it was not appropriate to reinstate Mr. Paramore. Mr. Paramore was awarded $17,860 in compensation.

The uncertainty and unpredictability which has unfolded in the Covid-19 pandemic has placed many employers and employees under significant stress. Restructures have increasingly been considered as a way to manage businesses and future proof.

Redundancies can be problematic and cannot only lead to expensive litigation but can lead to the irretrievable breakdown of professional relationships between employers and employees.

The team at WR Law has extensive experience in Employment Law and Human Resources Management. Our lawyers have the skills to navigate these matters effectively with the upmost professionalism.

Reference: from Article — Compensation for manager restructured out of job

This article has been prepared for information purposes only and is not legal advice. For legal advice regarding your specific circumstances, please contact WR Law directly on (03) 5499 6131 or by email at admin@wrlaw.com.au