It’s well known that the cost of living has increased post pandemic and businesses are not immune to these impacts. We’ve noticed an increase in queries about redundancies which has led us to thinking about the importance of getting it right.
The process of redundancy is lengthy from planning, undertaking consultation, decision making, considerations of redeployment and redundancy payments.
We want to keep you interested so we will deliver a series of bite sized articles over the next few weeks. In this article, we will identify what a genuine redundancy is under the Fair Work Act 2009 (the Act), and how to plan for redundancies.
So, what is redundancy?
Redundancy occurs when an employer no longer requires the position to be performed by the employee or by anyone else, due to operational requirements of the organisation/business (this is provided in section 389(1) of the Act).
The focus is on the position, not the person who holds it.
A helpful analogy is:
Imagine a basket full of sticks. The basket is the person who holds the position, and the sticks are the duties of the position. If the sticks are removed as they are no longer needed, the basket is empty and its position as the holder of the sticks is no longer needed and therefore redundant.
Genuine Redundancy
A redundancy will not be genuine if it was reasonable in the circumstances for the employee who holds the redundant position to be redeployed within the employer’s enterprise or an associated entity of the employer (under section 389(2) of the Act).
If the redundancy is not a genuine redundancy, claims may be brought against the employer for:
- unfair dismissal (section 385(d) of the Act);
- breach of contract;
- breach of an industrial instrument (Award or Enterprise Agreement)
- discrimination; or
- other claim under the Act.
In our next article we will delve into planning a restructure.
If you have any questions about redundancy, please contact us.
Written by Kate Barter and Nicole Dunn
Disclaimer: This publication has been provided for general guidance only and does not constitute professional legal advice. You should obtain professional legal advice before acting on information contained in this article.