Key factors to consider when facing redundancies

Taryn Heinrich

When dealing with redundancies, the process can be challenging and complex. Redundancies occur when an organisation needs to reduce its workforce, usually due to factors such as financial constraints, changes in business strategies, technological advancements or shifts in market demand. Running an effective redundancy process requires careful planning, clear communication and a focus on treating employees with respect and fairness.

As per the Fair Work Act 2009 definition, a genuine redundancy is when:

  • the person’s job doesn’t need to be done by anyone
  • the employer followed any consultation requirements in the award, enterprise agreement or other registered agreement.

When an employee’s dismissal is a genuine redundancy, the employee isn’t able to make an unfair dismissal claim.

A dismissal is NOT a genuine redundancy if the employer:

  • still needs the employee’s job to be done by someone (for example, hires someone else to do the job)
  • has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or
  • could have reasonably, in the circumstances, given the employee another job within the employer’s business or an associated entity.

Creating a strong and robust consultation period during redundancies is crucial for ensuring fairness, transparency and compliance with legal obligations. Here are some key factors to consider for a successful consultation period and redundancy outcome.

Legally compliant: Ensure that the consultation process complies with relevant employment laws, including any obligations outlined in awards, enterprise agreements or the Fair Work Act

Early Communication: As soon as the possibility of redundancies arises, inform employees and their representatives/support person about the potential changes. Early communication establishes trust and allows employees to prepare for the process.

Inclusive Approach: Include all affected employees and their representatives in the consultation process. This ensures that everyone’s concerns and perspectives are considered

Consultation Meetings: Organise regular and structured consultation meetings to discuss the redundancy process, its impact and possible alternatives. Use these meetings to seek feedback, answer questions and address concerns.

Provide Information: Share comprehensive information about the reasons for the redundancies, selection criteria, and any redeployment opportunities available. Transparently present the financial and operational factors during the decision.

Seek feedback: Actively listen to employees and their representatives’ feedback, suggestions and concerns. Be open to adjusting the plans based on reasonable input

Alternative Solutions: Explore and consider alternative solutions to redundancies, such as reduced working hours or redeployment options. Demonstrating all options were genuinely considered strengthens the process

Training and Support: Offer training and support to employees who might be redeployed into different roles. This helps them prepare for potential changes and enhances their chances of a successful redeployment

Timely Responses: Address all questions and concerns raised during the consultation period promptly and honestly. Timely responses demonstrate respect for employees feedback and suggestions

Documentation: Keep detailed records of all consultation activities, including meeting minutes, emails and feedback received. Document the reasons for decisions made during the process

Extension if needed: If the initial consultation period is not sufficient, consider extending it to allow for more meaningful discussions

Feedback review: Review the feedback received during the consultation period and incorporate relevant insights into the final decisions

Announcement plan: Develop a clear plan for announcing the final decisions and the outcome of the redundancy process. Be compassionate and provide resources for support, such as EAP if needed

Supportive Environment: The redundancy process should be handled with sensitivity and empathy. Employees should be given appropriate support throughout the process, and their rights and entitlements should be respected as per the Fair Work Act.

It is essential for employers to seek expert advice when undertaking the redundancy process to ensure compliance with legal requirements and to handle any potential complexities that may arise.

About The Author
Taryn Heinrich

Taryn’s passion is working with businesses and individuals to bring out their best. Taryn developed her HR generalist skills working on investigations, strategic planning, employment contracts, and developing and implementing HR policies and procedures.

Working closely with your business and employees, Taryn has a distinctive talent for setting people up with the tools they need to do their job safely and helping your business operate successfully. If you need help with anything HR related, Taryn is your go-to person!

On the weekend, you’ll find Taryn spending time with her family and friends – she’s always the first to arrive and the last to leave.

For more useful information, follow Taryn on LinkedIn.

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