NSW Local Government: changes in the management of redundancies
The Local Government Award 2014 (NSW), covering NSW Local Councils (“the LG Award”) is now in operation, replacing the 2010 LG Award. There has been a key change in this Award’s provisions dealing with redundancies.
Clause 39 of the LG Award specifies the procedure for Councils to implement workplace changes, some of which may include the redundancy of certain positions.
Employer’s duty to notify
An employer has a duty to notify when the change causes “significant effects” on employment. This includes:
· termination of employment,
· major changes in composition,
· operation of size of the employer’s workforce or in the skills required,
· the elimination or diminution of job opportunities,
· promotion opportunities or job tenure,
· the alteration of hours of work, and
· the need for retraining or transfer of employees to other work or locations and the restricting of jobs.
Pursuant to Clause 39(b)(i) of the LG Award, where the Council has made a “definite decision” to introduce major changes, the Council must notify the unions(s) whose members may be adversely affected by the proposed change at least 28 days before the change is implemented. Interestingly, the Council doesn’t need to tell its employees at the same time. The notification to the unions can also be made before or after the “definite decision” is made.
Under Clause 39(b)(ii) of the LG Award, the unions, may, on being notified of the proposed change, respond to the employer in writing within the 28 days. The responses could provide alternatives to the decision to lessen the impact on employees’ losing their positions or they could seek further clarifications. The responses must be provided by the Council to the decision maker within seven days to enable re-consideration of the decisions.
In our opinion, the timing of the notification to the unions will be dependent on the sensitivity of the information and the impacts it may cause to employees. We generally do not think it prudent to tell the unions before notification is also given to the affected employees, so that accidental or intentional leaks are avoided. In our opinion, it is the employer’s right and obligation to communicate with its employees. Also notification to the employees will, if written correctly, commence the notice period which, under Clause 39(b)(v) of the LG Award is a mandatory five weeks or payment in lieu. However, if technological change is involved, it increases to three months, or payment in lieu.
It is important to note that notice to the union of the proposed changes to the structure shall not form part of any notice period to employees. Accordingly, Council must be prepared and organised as to their timing. It cannot be left too late as Council will be in breach if the timing is not followed.
Under Clause 39(b)(iii) of the LG Award, if the changes are required immediately, then the Council may implement them if there is agreement with the employees and their unions. The unions must still have been provided with 7 days’ notice of the proposed changes.
Many Councils forget to tell Centrelink of the impending redundancies. Clause 39(iv) of the LG Award states that:
Where a decision has been made to terminate fifteen (15) or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons, the employer shall notify Centrelink as soon as possible giving relevant information as provided at s.530 of the Fair Work Act 2009 (Cth).