Cornwall Stodart recently advised a large
corporation in relation to the sale of a part of its business.
As a consequence of the sale, the positions of a number of
employees working at the site in question were made redundant.
Several employees brought unfair dismissal claims in the Australian
Industrial Relations Commission against our client seeking
substantial compensation arising from their redundancy.
The Applicants claimed that they had neither been provided
with proper notice of the termination of their employment nor
paid adequate severance pay.
The Applicants submitted that they did not receive the required
five weeks' notice because the actual notice they received
was "conditional" notice (conditional on due diligence
and similar matters in connection with the sale proceeding).
As to severance pay, the Applicants argued that the amount
paid was insufficient, as it was calculated on their base rates
of pay and gave too little weight to their lengths of service.
As no industrial instrument setting out redundancy payment
obligations applied to the Applicants' employment, our client
had no statutory obligation to make severance payments. We
had advised our client to use an appropriate industry award
as a guide, as it embodied the "community standard" for
employees in that industry at the time. The AIRC endorsed this
practice, saying that the amounts paid represented an appropriate
standard of "industrial behaviour".
The AIRC also approved the giving of conditional notice,
saying that it gave the employees an opportunity to "adjust
to the proposed change in circumstances, reorganise their
lives and seek alternative employment".
The AIRC found that the employees had been afforded a "fair
go all round". Each of the claims were dismissed.
