Sometimes an employer will no longer require an employee’s job to be done by anyone. This is known as a redundancy. Reasons for redundancy can be the result of introduction of new technology, changes to the market (ie. lower sales or production), changing operational demands as well as the general need to increase efficiency and reduce costs of doing business.
In those circumstances, the law offers significant protection to employees exposed to the proposed changes. In most cases, the law not only requires the employer to have a valid reason for making the decision, but also requires them to follow numerous procedural steps to implement the redundancy.
A redundancy is only exempt from unfair dismissal when the redundancy is genuine.
A redundancy is genuine when:
The redundancy is made in compliance with the terms and conditions of a Modern Award or enterprise agreement that applied to the employment to consult about the redundancy
A redundancy is not genuine in circumstances where the employer:
If an employer is unsure whether the redundancy is genuine or not, they should seek expert advice from a qualified practitioner or work relations specialist.
To ensure a business not only satisfies its obligations, but avoids unnecessary disputes by troublesome employees, it is recommended that a formal consultation process is undertaken, which should be documented accordingly.
An employer should not tell an employee that they have made a definitive decision until consultation has been completed.
Typically consultation commences with a discussion with an employee outlining that the business is considering making that person’s job redundant. Following this discussion, the employer should invite the employee to a formal meeting to discuss the possibility of redundancy in more depth and, particularly, possibilities of re-placement and alternatives which may save the employee’s position.
It is a good idea to keep a record of any invitations to redundancy meetings and follow each meeting up with a written summary.
At the formal meeting, the employer would ideally consult regarding the redundancy process, explain how the selection will work, explore options for redeployment and alternatives to redundancy.
What amounts to a reasonable deployment depends on the facts of the case and advice should always be taken on specific circumstances.
In many cases, to properly satisfy its obligations, a business may be required to meet on more than one occasion.
If, subsequent to a fair process having been conducted, it is determined that the outcome will be redundancy, a final meeting should be convened. At that time, the employer should deliver a preliminary outcome.
Following confirmation of redundancy, a formal letter of redundancy should be issued to the employee.
The information contained in a letter of notification of redundancy should:
Employsure advisers are experts in matters concerning redundancy and in regards to writing letters of redundancy. If you have any questions about what to include in a letter of redundancy, please call us for peace of mind on our Advice Line on 1300 651 415.