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RedundancySeptember 23, 2016
Every day Employsure assists business owners who are struggling to understand their obligations under complicated workplace legislation.
We often hear from employers who have similar complaints or concerns regarding workplace relations, so in order to assist we have been addressing these concerns on an ongoing basis and will continue to do so over the coming weeks and months.
Today’s article will focus on another common query: why do I need to follow a redundancy process?
There may come a time when a business no longer needs to fulfil a certain role. This could be due to unfortunate circumstances such as a company becoming insolvent or bankrupt, a takeover occurs or new technology is introduced which removes the necessity of an employee.
If the circumstances arise where you are faced with having to make a team member redundant, you must ensure you comply with the minimum requirements stipulated in the Fair Work Act 2009 and National Employment Standards (NES). If a fair process is not adhered to, unfair dismissal claims may arise.
Employers must ensure that a redundancy is genuine. The first question to ask yourself is: will I need to hire another person to fill this role or duties? If the answer is yes, then the redundancy is not a genuine one. A redundancy will also not be considered genuine if:
• an employer fails to consult with their employee regarding the redundancy
• an employer could have reasonably offered the employee alternative employment with the business or associated entity
Assuming a redundancy must take place due to genuine reasons, the first stage of a fair redundancy process is to warn the relevant employee(s).
This will typically involve meeting with the employee(s) at risk to explain why the business is considering making their role redundant. It is important to stress there is not a concluded outcome at this stage, but that the employee is simply being notified of the possibility. It is good practice to keep a record of any such meeting.
Following the warning meeting, the relevant employee(s) should be invited to a consultation meeting. This is the point at which they have the opportunity to ask any questions relating to the redundancy process, and to put forward any suggestions to avoid the redundancy. As part of the consultation process, the employer should consider whether the employee(s) could be reasonably deployed elsewhere in the business.
If the role is made redundant, the employee(s) should be called to a final meeting to inform them of the outcome, with confirmation made in writing. They should be permitted to bring a support person to this meeting. It is noted that under the NES an employer must give an employee notice of termination in writing.
Redundancies can quickly become a complicated and difficult process for all parties involved. Following an incorrect procedure can cause unnecessary stress and possible unfair dismissal claims. As Australia’s leading workplace relations specialist, we can help you if you have any questions relating to redundancy. Call us today on 1300 651 415.