Redundancy vs Performance Management

Taryn Heinrich

Dealing with underperforming employees can be a very time-consuming task and often employers will look for a quick fix.

One of the first things that is frequently considered is, let’s just make the position redundant.  Whilst there can be a legitimate reason to move someone on from the company under these circumstances, it also comes with strict criteria that must be met to ensure you do not open yourself up to an unfair dismissal claim that you cannot defend.

So how do you know if you should be looking at redundancy, or if perhaps you really just need to invest some time into a performance improvement plan with set KPI’s and outcomes that need to be achieved?

First of all, what is redundancy? Before you look to commence with any consultation in relation to redundancy, you need to review the following criteria to establish if it is in fact a genuine redundancy.

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, they hire 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.

If you have established that it is not a genuine redundancy and you are still unhappy with the performance of an employee, what next?

When dealing with unsatisfactory performance, you should assess the issues, what is not actually being achieved and then look to implement a performance improvement plan.

A good performance improvement plan starts with a good performance management policy. Your employee should know what to expect if their performance is not satisfactory, including what the outcomes for them could be, should they not show significant improvement.

When assessing if an employee is meeting the requirements of their role, some key things to consider are:

  • are there any external factors that could be contributing to an employee’s poor performance?
  • are the expectations of the position and workload fair and reasonable?
  • could the performance issues be due to lack of training?
  • is the employee actually clear on the expectations of the position?
  • have you allowed for a reasonable timeframe to measure the improvement of an employee?

If you are clear on providing the employee with your expectations of the position and have set targets and KPIs for them to meet in a reasonable timeframe it can often be a successful undertaking. Who knows, you may have a re-energised and focused employee at the end of it all.

You may also go through this process and performance will not have improved, meaning you still need to move them on from the business. But you will do it after following a set procedure that was fully understood by all parties and that will protect the business from any future litigation.

Redundancy should not replace a performance management process. Invest time in your people to show that you are willing to take the time to work with your staff to help them be their best and get the best out of them. Most people are not turning up to work to do a bad job, they may just need to refocus and realign to the company’s goals and values.

All redundancy information provided is the criteria as set out by Fair Work and you should seek expert advice when considering a redundancy.

If you are looking for assistance with a redundancy consultation or if you would like to implement a performance management policy, give us a call on 03 5331 1734 to book your free Inspire HQ People Hour. For more information, visit our Human Resources page.

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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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