Ombudsman to probe Commander job cuts

The Office of the Federal Workplace Ombudsman announced yesterday that it will be investigating the dismissal of 600 staff at telco Commander as part of its turnaround plan released this week.

Commander released the details of the plan on Wednesday following a strategic review by its recently appointed management team.

Nicholas Wilson, Commonwealth Workplace Ombudsman

Credit: Workplace Ombudsman

New CEO Amanda Lacaze told ZDNet.com.au yesterday that while she was saddened by the decision to cut staff, she believes it was a necessary step to ensure the business recovers.

Lacaze stated that the telco had allocated AU$17 million in dispensation payments for the redundant workers, who will primarily come from middle management and the company's IT hardware group.

The telco estimates that the dismissals will save around AU$65 million in payroll expenses annually.

"Most workers employed on a permanent basis will be owed entitlements at the time that their employment ends and can include accrued annual leave or pro rata long service leave if the employee is eligible," Michael Campbell, the Workplace Ombudsman's executive director for external affairs, said in a statement.

At this stage the Ombudsman is overseeing the dismissal process to ensure that all workers receive their full entitlements under Australian federal workplace law.

"When a permanent employee's employment is terminated, they must also receive pay in lieu of notice as well as any other entitlement that is provided for in their award or certified agreement which can include pay for years of service," Campbell said.

"We will certainly provide all of the information and documentation the Ombudsman is requesting and we're very confident about having this conversation," Commander's Lacaze explained in a statement today.

"One of the major changes the Howard government introduced under the Workchoices legislation was to allow businesses to dismiss staff for 'operational reasons'," said Joellen Riley, Professor of Law at the University of New South Wales (UNSW).

According to Riley, this particular change in the legislation has meant that businesses of all sizes have been given more leeway to make staff redundant for cost cutting or restructuring purposes, as long as they are able to prove that the organisation has a sufficient reason for doing so.

She went on to say that some businesses have engaged in so called "spill and fill" policies -- where some redundant workers are re-offered adapted positions in the organisation after restructuring on a lower remuneration scheme.

"We actively considered opportunities for redeployment for people whose roles are no longer required in the new structure. However, in many cases this was not possible," said Commander CEO Lacaze.

UNSW's Riley claimed that it is not routine for the Ombudsman to announce its intentions to scrutinise such activities unless they are substantial enough to warrant media coverage, as the Commander dismissals have.

"Since workplace relations has become such a highly politically sensitive issue the Ombudsman will tend to make its presence felt more when workplace laws are being used strategically by a company," she said.