The Fair Work Commission has made orders against Australia’s leading legal transcription service provider for failing to properly consult with employees in accordance with its enterprise agreement before giving effect to redundancies arising out of the COVID-19 pandemic.
In response to the business impact of the COVID-19 pandemic, Auscript decided to close or partially close its Sydney, Adelaide and Hobart offices and to make 25 employees redundant without consulting its employees or the ASU.
The business advised that it had suffered an estimated 60% or more reduction in transcript work as courts and tribunals responded to restrictions imposed to slow the spread of COVID-19. It claimed that this development and its forecasts required it make sudden decisions to maintain the viability of its business in Australia.
The dispute was filed in the Fair Work Commission on the basis that Auscript failed to comply with its consultation obligations before closing its sites and deciding to make employees redundant. After its failure to comply with its consultation obligations on another occasion. The ASU and Auscript agreed to develop a joint Consultation and Communication Protocol to avoid Auscript’s further potential failure in complying with their obligations. The detail of the Protocol was largely agreed between the parties when Auscript determined to make further redundancies in direct response to the impact of COVID-19 on their business.
Commissioner Yilmaz noted that Auscript had given a verbal commitment to an agreed statement that it was committed to permanent jobs and would genuinely consider alternatives to redundancy, but concealed its decision to make the employees redundant. The decision only became apparent when the CEO from the US joined the Fair Work Commission conference on 3 April 2020. It also became apparent that the company’s decision to make employees redundant was made before it was disclosed to the ASU.
The Commission outlined that it was not satisfied that Auscript gave genuine consideration to options other than redundancy. It found that Auscript had not consulted its employees or the ASU as required by the agreement and ordered it to refrain from compulsory redundancies until it met more than once with employees to traverse options, while providing regular updates to the union.
Lessons Learned:
Employers ought to be circumspect in rushing to implement measures to respond to the business impact of the COVID-19 pandemic. While the Government has implemented a number of assistive measures, employers must consider options that are available to them within the framework of an existing enterprise agreement, particularly as it relates to decisions that trigger the requirement to consult with employees;
Making employees redundant generally triggers this requirement, particularly if an enterprise agreement incorporates the model consultation term under the Fair Work Regulations 2009 (Cth), which requires employers to consult with employees about how it can mitigate the adverse effects of the decision on employees; and
Employers must also consider any available opportunities for employees to be redeployed in an alternative role before they are made redundant.
