It is possible that once the JobKeeper wage subsidy ends you may be placed in the unfortunate position of making some employees redundant. Are you comfortable navigating the redundancy process while mitigating the danger of a potential unfair dismissal claim? 

Do you have full or parttime roles for your employees when JobKeeper end? Does their job exist? 

Your first consideration must be whether you will have full or part-time roles for your employees after JobKeeper ends on 28 March 2021. If the need for certain roles within your organisation has disappeared or if a sustained downturn has resulted in roles within your business disappearing, you may need to consider whether you need to make some of your employees redundant. The redundancy process can be a difficult process for an employer to navigate on their own. There is potential that an improperly performed redundancy process can give rise to unfair dismissal claims by your employees. You should always seek legal advice before making an employee redundant.   

Restructuring the workplace. Can you make your employees redundant while they are on JobKeeper? 

Despite the introduction of JobKeeper, there have been no changes to the Fair Work Act’s rules around redundanciesthe current framework for a ‘genuine redundancy’ still requires that: 

  • the employee’s role is no longer required to be performed by anyone due to changes in how your business operates; and 
  • you comply with your obligations under the applicable Award or Enterprise Agreement.

It is important to note that if there is a reasonable opportunity for your employee to be redeployed within your business, there will not be a ‘genuine redundancy’ and you could be subject to an unfair dismissal claim. The redundancy process focuses on whether the employee’s role has survived a change in the businesses operations, and not whether there is a need for that employee’s role to still be performed. 

For further detail on this topic, see our article ‘What is a genuine redundancy?’. 

What if you can’t afford the redundancy? 

If your business has suffered a downturn, it is possible that you will be unable to pay the full amount of your employee’s redundancy package. In this scenario, it is possible to apply to the Fair Work Commission to reduce the amount of redundancy pay so your business can survive.

How we can help

You are not alone in feeling overwhelmed by your obligations as an employer. We are at the other end of the line if you need some further information or some guidance about what to do if you are in the unfortunate position of letting go staff. Contact JFM Law on (02) 9199 8597.