Blog

HR news and updates from the E.L Blue Team

Redundancy – it is all in the consultation !

It is a tough time for all businesses at the moment, with challenges everywhere we look. 

For some businesses, finding staff and recruiting is the issue, while for others it is what to do with staff that don’t have a role after the company has pivoted or had to downsize dramatically. 

Redundancy is a word on many people’s minds, it is also one area that is causing lots of extra work for the Fairwork Commission as complaints rise.

Genuine Redundancy

The basis for a genuine redundancy to occur is pretty clear, and happens when an employer

  • Doesn’t need an employee’s job to be done by anyone or
  • Becomes insolvent or bankrupt.

A genuine redundancy has occurred when;

  • The persons job doesn’t need to be done by anyone
  • The employer has followed any consultation requirements in an award, enterprise agreement or other registered agreement.

(Source : https://www.fairwork.gov.au/ending-employment/redundancy)

The reasons and proof of the need for a redundancy are usually quite easy to establish, it is however the lack of consultation where the problems arise.

Consultation

It is good practice to make sure there are a number of clear separate steps in the consultation process.

Advisory

  • Notify employees of changes in the business and advise employees that maybe affected by the changes.
  • Provide details on how these changes will affect the employee
  • Discuss options that might be possible to mitigate impact on the employee.
  • At this point no decision is made.

Consideration

  • Give the employee adequate time to consider the advice.
  • Advise employee that they have the opportunity to make alternate suggestions.
  • Schedule a time to discuss this further with the employee.

Discussion

  • Provide opportunity for the employee to offer their suggestions or ideas.
  • Openly discuss all alternatives and possible arrangements.

Decision

  • After considering employee suggestions and alternatives, a decision can be made.
  • If redundancy is the only option, the redundancy payment and terms should be calculated.

A sound consultative process will ensure the best outcome possible for the employee and the company.

Contact E.L Blue if you would like some assistance with this process.