Failure to consent: financial penalty for consultation failure

All enterprise agreements impose mandatory obligations on employers to consult with employees about ‘major’ changes in the workplace. These obligations are not only relevant to unfair dismissal claims, but a failure to comply can result in fines and penalties. A recent decision of the federal circuit court of Australia emphasises the importance of the obligations and demonstrates the willingness of courts to impose a penalty even for a single contravention.

In CEPU v ThyssenKrupp Elevator Australia Pty Ltd, a penalty of $15,300 (£8,546) was imposed on the employer for neglecting to consult with an employee whom it made redundant. The court stressed that consultation was an ‘important and valuable right’ and it is imperative for employers to properly understand the nature of their obligation.

Under the Fair Work Act 2009 (Cth) (FW Act) it is mandatory for enterprise agreements to contain a clause requiring employers to consult with its employees about…

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