Client?
Call Now
  1. Home
  2. Media releases
  3. Redundancies on the rise as businesses feel the pinch

Redundancies on the Rise as Businesses Feel the Pinch

Published July 3, 2022 (last updated on November 29, 2023) | Adam Wyatt - Content Writer

Image

As the 21-22 financial year ends, businesses across the nation are under increased pressure to balance their budgets and prepare for an increasingly uncertain year ahead. No sector has been immune to financial pressures with several high-profile construction companies, as well as technology start-ups going bust or drastically restructuring to avoid closure.

As a result of increased financial pressures from record inflation, interest rate rises, and increased operational costs, many employers are turning to redundancies to reduce headcount and overheads.

Employment relations firm, Employsure representing over 30,000 businesses experienced a 64% increase of calls to their advice line between May and June 2022 from concerned employers unsure of what their redundancy obligations are under the Fair Work Act.

“The process around redundancies can be complex as it requires employers to demonstrate that the role being made redundant is no longer required by the business.” Said Employsure Head of Operations, Stephen Roebuck.

“It is not a tool to dismiss an employee for performance or conduct. In cases where this does happen, the redundancy will not be considered genuine and may expose the business to an unfair dismissal or adverse action claim.”

Employers looking at making redundancies must follow a consultation process and consider the amount they must pay to affected employees based on the size of business, modern award coverage, and employee’s length of service[1].

Mr. Roebuck continued, “Where many employers get into trouble is they fail to follow fair process which includes discussing how the affected employee(s) might be retained within the business.”

“This can be made more complicated the longer an employee has been with the business.”

“It’s a two-way process and shouldn’t be rushed, especially since shortcuts taken could cost your business. Employers unsure of their obligations should seek help from qualified experts who can ensure that complete and compliant procedure takes place.”


[1] Generally small businesses with less than 15 Employees are exempt from redundancy payments unless the modern award has a redundancy specific scheme such as the Building and Construction Award.

Latest Media Releases

Have a question?

Employsure Logo

Not a client yet?

1300 207 182

Existing clients call (AU)

1300 651 415

Existing clients call (overseas)

+61 2 8123 3640

Employsure HQ

Level 6/180 Thomas St, Sydney NSW 2000
Peninsula LogoEmploysure Law LogoFair Work Help LogoEmploysure Mutual LogoBright HR LogoHealth Assured LogoGraphite HRM Logo
Peninsula LogoEmploysure Law LogoFair Work Help LogoEmploysure Mutual LogoBright HR LogoHealth Assured LogoGraphite HRM Logo

Copyright © 2024 Employsure Pty Ltd. ABN 40 145 676 026

Employsure Protect is a financial product issued by Employsure Mutual Limited ACN 630 256 478 (AFSL 544232). Employsure Mutual has appointed Employsure Pty Ltd as its Authorised Representative (No. 001274577) to distribute the product and provide general advice. To decide if this product is right for you, please read the Employsure Protect Product Disclosure Statement (PDS) and Target Market Determination.