The Workplace Relations Act 1996 (Cth), contains within it a provision [s 643 (1)] for relief from termination of employment. However, there is an exemption to this sub – section. The exemption is known as the Operational Reasons provision. The relevant provisions are ss 643(8) and 643(9). These provisions essentially say:
643 (8) an unfair termination application cannot be made if the employee’s employment was terminated for “genuine operational reasons or for reasons that include genuine operational reasons”, and
643 (9) “operational reasons” are defined as “reasons of an economic, technological structural or similar nature relating to the employer’s undertaking, establishment, service or business” or reasons including the aforementioned reasons.
Recently, a number of cases have tested the “operational reasons” section of the Workplace Relations Act.
Interestingly, each of these cases cite Carter v Village Cinema’s Australia Pty Ltd (15 January 2007) PR975821, in order to determine the meaning of ‘genuine’ and also to determine that the operational reason need only be a ground or cause for the termination of employment.
Whether the employer could have taken an alternative action to terminating the employee’s employment, will generally be irrelevant. Hence, Village Cinema’s seems to be the authoritative case in this matter.
The three new cases are:
1) Mr Brent Acworth v Boeing Australia Limited (U2007/2946 (25 May 2007)
2) M Sperac v Global Television Services Pty Ltd (U2007/2991) (1 June 2007)
3) A Cruickshank v Priceline Pty Ltd [2007] AIRCFB 513 (27 June 2007)
These cases had with some unexpected results.
In Brent Acworth v Boeing Australia Limited, it was determined that the Plaintiff refusing to accept reassignment, was not sufficient enough for his termination of employment to fall within the genuine operational reasons provision.In Sperac v Global Television Services it was determined that because a restructure was intended to address economic and operational issues, it therefore fell within the operational reasons exemption.
Surprisingly, the result in Cruickshank v Priceline Pty Ltd was a back flip from Sperac. The decision at first instance, that the termination of employment was due to operational reasons resulting from economic difficulties and restructure to reduce costs, was overturned on appeal.
Although these cases assist (somewhat) in further defining the boundaries of the operational reasons provision, it will be interesting to see what this means for the operational reasons provisions in the future. Other Commissioners or Judge’s will be able to take either Sperac’s approach or Cruickshank’s approach when considering matters of termination of employment due to operational reasons of economic
difficulties and restructure to reduce costs and whether these will constitute operational reasons for the purposes of s 643(8) and (9).