“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce,” a company-wide email from last week read.

“We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward.”

The apparent shutting down of systems ahead of widespread lay-offs is “unusual in the Australian context”, Clayton Utz partner Amanda Lyras told Lawyers Weekly, whilst appreciating this story is still unfolding across multiple jurisdictions. 

VIEW ALL

In the face of such ongoing developments, Lawyers Weekly spoke with numerous employment law partners and principals about what boxes Twitter will need to tick if it is to avoid running afoul of Australian law.

Such an examination is pertinent, given that — as Swaab partner Michael Byrnes pointed out — the mass lay-offs at Twitter highlight “a significant issue that can arise for global organisations implementing redundancies internationally, namely the potential conflict between consistency in approach across the company and compliance with the applicable employment laws in each jurisdiction”.

A globally consistent approach, he outlined, “streamlines the process and simplifies execution, but can put the employer at legal risk”.

Unfair dismissal

Changes in business direction and restructures can, Shine Lawyers head of employment law Samantha Mangwana discussed, “sadly lead to genuine redundancies”.

“Importantly, for that to be the case, employers need to follow any consultation process in an applicable award or enterprise agreement, and offer redeployment to any suitable available roles. If they do not, then the employee may seek unfair dismissal,” she explained.

“Another issue to watch out for is if mass lay-offs are being used as a cover to get rid of people for unlawful reasons personal to them in employment — like discrimination or complaining about their terms and conditions — rather than a genuine redundancy situation impacting their role.”

Time limits can be very tight, Ms Mangwana noted, and, in some cases, only 21 days from termination. As such, she said, “it is crucial to take advice promptly”.

The majority of Australian employees, Maurice Blackburn principal Giri Sivaraman said, have access to unfair dismissal laws, which he said require due process and a valid reason to sack someone.

“Even where there is a valid reason and natural justice, a dismissal can be harsh,” he mused.

“Simply locking people out of the workplace, with no consultation, fails the most basic procedural fairness requirements.

“Doing it in such a callous way could be considered harsh as well.”

Applicable awards and Fair Work expectations

From a legal perspective, Ms Lyras outlined, any lay-offs in Australia would need to be in line with requirements under employment contracts, the Fair Work Act and any applicable industrial instruments, “which can be more onerous than in other countries, including from a consultation perspective”. 

These requirements, Mr Byrnes said, present “a few traps” for multinational employers in a situation such as that which Twitter currently finds itself in.

“One is the need to comply with the consultation obligations in any applicable modern award. An edict from the global head office with no room for input from affected staff is antithetical to the consultative approach mandated in modern awards,” he submitted.

Another, Mr Byrnes went on, is the manner in which employees are notified of the termination of employment.

“The Fair Work Commission has repeatedly stated that the ideal manner in which employees should be notified of a termination of their employment is in person. If that is not practicable, then they should at least be notified personally over video conference,” he said.

“To notify employees of the termination of employment by email is frowned upon by the commission and will be a factor taken into account in considering the procedural fairness of the dismissal.”

Reflecting on the unfolding saga, Ms Lyras mused that it is “hard to comment meaningfully on the extent to which any claims might arise, as this would depend on the strategy and process that is ultimately followed”. 

Of course, she noted, “there is also the potential for wider impacts on reputation and ongoing staff attraction and retention in a tight employment market”.

Mass redundancies and a potential class action

Furthermore, Mr Byrnes went on, there is a need for an employer to demonstrate that the specific position made redundant is no longer required.

“A hastily executed mass cull of employees can sometimes mean the necessary groundwork of establishing the operational or organisational rationale for the redundancy of the position has not been undertaken,” he warned.

“If there are a large number of redundancies implemented by an employer in a near identical way with similar legal deficiencies, then this lends itself to either a class action or, as an alternative, an application that the cases are heard and determined as a group.”

On the question of whether the social media platform could face a potential class action from hypothetical former employees of Twitter, Mr Sivaraman said that when a group of people have a similar claim, “it may be possible bring a class action”.

However, he stressed, this is rare in employment matters, other than mass underpayment claims.

Novel approaches to termination of employment

This all said, Mr Byrnes identified that certain US companies, particularly those in the tech industry, have either implemented or proposed some novel approaches to termination of employment.

“One example is termination of employment for performance using a bell curve system, so that a specified percentage have their employment terminated on the basis of performance each year. It has even been suggested some companies might look to terminate employment by algorithm, with dismissal decisions made by artificial intelligence rather than an actual person,” he detailed.

However, he continued, such ideas, “which might seem innovative and a catalyst for sustaining a high-performance culture to the Silicon Valley entrepreneurs who promote them, are often difficult (if not impossible) to reconcile with the requirements of Australian employment law”.