Redundancy – Make sure you follow the rules
“We are going to make an employee redundant, what do we need to do?”
Redundancy is often perceived by employers to be the fastest and easiest way to terminate an employee’s employment – however in reality, it is a time consuming and often expensive path to take.
There are two primary reasons for this – the first is that many Modern Awards require consultation with employees prior to redundancy taking effect; the second is the requirement for the redundancy to be ‘genuine’. Failure to meet either of these requirements can result in fines, reinstatement of the employee or other legal actions or orders.
Although each Modern Award is different, generally speaking, Awards require employers meet with affected employees to provide them with information relating to the proposed redundancy and discuss measures that could be taken to lessen the adverse effects of the redundancy if it does occur (for example, outplacement assistance).
Genuine Redundancy requirements
The Fair Work Act (2009, CTH) determines a redundancy to be genuine when:
- The employee is dismissed because the employer no longer wants anyone to do the job due to changed operational requirements;
- The employer has complied with any consultation requirements derived from the relevant Modern Award(s) and/or Enterprise agreement; and
- It was not reasonable for the employer to redeploy the employee within their own organisation or that of an associated organisation.
To discuss your situation and protect your business from Unfair Dismissal claims arising from redundancy; or if you wish to organise outplacement assistance for an employee you are making redundant, contact the friendly team here at HR On-Demand on 1300 55 99 62.