In today’s changing economic and technological environment the process of making an employee redundant is very common. Did you know that as an employer, you have strict statutory duties and responsibilities to follow in respect of that redundancy? If those responsibilities are not carried out, then the redundancy may not be genuine, and you will expose yourself to an unfair dismissal claim.
What is a genuine redundancy?
The meaning of a genuine redundancy is specified in section 389 of the Fair Work Act 2009 (Cth). An employee’s dismissal is only a case of genuine redundancy if:
- The role is no longer required due to changes in the operational requirements of the company; AND
- The employer has complied with an obligation in the modern award that applied to the employment to consult about the redundancy.
The legal definition of a genuine redundancy imposes two strict obligations on the employer. The first is that the role of the employee has been genuinely abolished. That is, the primary duties associated with the job role are no longer required. The abolition of a job role can arise from the following circumstances:
- Introduction of new technology;
- Recent company mergers or acquisitions;
- Changes in reporting lines; and
- Changes in financial and economic circumstances.
Once it has been determined that a position has been made redundant the employer must follow strict protocol which is generally found in the modern Award. Those requirements usually including the following:
1. An opportunity to consult with the employee.
As an employer, you must notify the employee of the organisational and structural changes and how that affects the employee. These discussions should take place as soon as possible.
You must make a genuine effort to find an alternative position for the redundant employee. This is an extremely important step that can mitigate the risk of an unfair dismissal claim. However, many employers forget to satisfy this requirement.
2. Job search entitlements
It is important that you are familiar with the relevant award governing the employee’s job role. That Award may place a positive obligation on you to provide the employee with one paid day a week
What can we do for you?
We can guide you the process of making an employee redundant. We will make sure that the employee is provided with all their entitlements under the modern award and that you fulfil your obligations during this process.
Contact JFM Law on (02) 9199 8597 for a no obligation chat. If you would rather get in contact through email, send your question through or by email at wehelp@jfmlaw.com.au.
More information
Join our team as we answer your FAQs about Redundancy. To access the transcript, click here.
The information contained in this post is current at the date of editing – 19 July 2023.
