Employee Dismissal and Redundancy Support for Businesses

The information contained in a letter of notification of redundancy should:

• Provide an overview of the situation generally (eg. the reason why the redundancy is being considered)
• Provide an outline of the process that has been followed (steps of consultation)
• Confirm the employer has reviewed other areas in the business and that there are no suitable vacancies or opportunities for redeployment
• Confirm there is no suitable alternative to avoid the redundancy
• Clearly state the position is being made redundant and explain the reasoning behind the decision.
• Specify the last date of the employee’s employment with the company
• Break down the monetary entitlements the employee will receive and specify when they can expect to receive them (i.e. annual leave, overtime, long service leave)

A Redundancy process will usually consist of three stages:

• Notification or warning that the employee’s job is at risk of being made redundant;
• Consultation with the employee including discussion regarding the selection process and any alternative employment options;
• Confirmation of Outcome (and follow-up redundancy letter including written notification of the employment end date and entitlements owed)

Essentially, redundancy is the elimination of a job role because it is no longer required, while retrenchment is the termination of the employee filling that redundant role.

These are the steps that need to be taken to ensure the redundancy is genuine. The employer should not require anyone to do the job anymore for operational reasons and must follow any consultation requirements in the applicable industrial instrument, as well as exploring redeployment options, before dismissing the employee.

This usually refers to the process outcome letter confirming the employee is being made redundant. It should outline the process in coming to that decision, and the reasoning behind it, and any further considerations such as redeployment options. It should also include notice of the last day of employment and details as to final pay and any entitlements owing.

It depends on the circumstances. The employer must move through each of the three stages, usually involving multiple meetings with corresponding invitations and follow-up documentation. Timing will depend upon the consultation requirements and the size of a business.

Firing occurs when an employee's poor performance or conduct justifies ending their employment. This could be due to poor performance, misconduct, or disciplinary issues.  

Redundancy occurs when the employee's role is no longer needed due to operational changes, not their individual performance. Examples include restructuring, outsourcing or technology advancements. 

Both occur if due to operational requirements the business does not need anyone to perform the employee’s role anymore. Redeployment is where the employee is offered an alternative position within the business, or an associated business. Redundancy is when an employee is dismissed after consultation because there are no other roles within the business or an associated business that the employee could reasonably do.

Generally, depending on the employee’s employment type, their length of service, the size of the business, and the applicable award, an employee may be entitled to notice, redundancy pay, any untaken annual leave and possibly long service leave, depending on the circumstances.

No, only the Fair Work Commission can decide to reduce the amount of redundancy pay based on the circumstances, but an employer can apply to the Fair Work Commission to have the amount of redundancy they have to pay reduced if:

• the employer finds other acceptable employment for the employee, or
• the employer can’t afford the full redundancy amount.