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Employee Redundancy Complaints

Redundancy

27 June 2025 (Last updated 3 Dec 2025)

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A redundancy occurs when an employee’s job is no longer required for the business. In some circumstances, this is because new technology fulfils the job obligation, the business is relocating or closing down, or the employee’s job may be divided up and then transferred to various other employees.

A genuine redundancy should not occur because of an employee’s performance or conduct. Employers need to follow a fair procedure that includes plenty of consultation and communication. Not surprisingly, some employees may feel their redundancy is unfair and make a complaint. We have compiled some tips on dealing with employee redundancy complaints. 

Regular communication with all employees is important during periods when business is undergoing major workplace change. Most Modern Awards and registered agreements require employers to consult with their employees regarding changes, including adjustments to production, organisation, structure or technology.

Redundancy process

There is a process that employers can follow to ensure they are being fair. Initially, you can consult employees who need to be made redundant about:

  • Reasons for redundancy and the jobs affected
  • The alternatives to redundancy, such as voluntary redundancies, or reduced working hours
  • The selection criteria for those employees at risk of redundancy
  • How the redundancy selection assessment was carried out
  • Any suitable alternative work

After consultation, you should decide which employees are doing sufficiently similar work and put them in a pool to be considered for redundancy. 

The selection criteria to decide who is to be made redundant should be non-discriminatory, objective and measurable. Typical criteria could include:

  • Individual skills and qualifications
  • Performance or aptitude for work
  • Attendance and absence record
  • Disciplinary record
  • Customer feedback

Information employers need to have

To avoid complaints from employees, employers are advised to be prepared for common employee questions and be prepared to show that redundancies are genuine. Ensure you are prepared with information such as what is listed below:

  • Why is there a redundancy situation?
  • Which employees are at risk?
  • Why the employee(s) have been selected and what consideration was given to putting other employees at risk of redundancy?
  • Who was in the selection pool?
  • What were the selection criteria and how were they measured?
  • Whether any employees (at risk of redundancy) have been offered alternative jobs, with details of the jobs

It is crucial to determine the minimum notice of termination and redundancy pay entitlements for each affected employee. Notice of termination and redundancy entitlements are contained in the National Employment Standards, however, Modern Awards and Enterprise Agreements often include additional redundancy entitlements for employees. If there is an applicable contract of employment or workplace policy that provides different redundancy amounts than what is outlined in the National Employment Standards, you need to provide the employee with whichever is more generous.

An employee may choose to submit a complaint or claim against you (e.g. unfair dismissal, discrimination) even if you follow correct redundancy procedures.

Build better businesses with Peninsula

Peninsula can help minimise the risks of employee redundancy complaints by providing expert redundancy advice in accordance with Australian Fair Work legislation. Contact Peninsula to learn more.

This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

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Redundancy

Voluntary redundancy

Voluntary redundancy occurs when an employee volunteers or agrees to be made redundant. In most cases of voluntary redundancy, the employer offers a financial incentive to an employee to voluntarily resign, ideally subject to a formal Deed of Release which ends the employment relationship and generally prevents the employee from bringing a successful claim against the employer. In effect, the business benefits as they do not have to undergo the trauma and turmoil associated with downsizing, including reputational risks which arise from such discussions. The business may be able to forego the protracted consultation processes that are required to effect a genuine redundancy. A genuine redundancy occurs when a business no longer requires anyone to do the employee’s job. Employers should follow a fair procedure for redundancy, including consultation (where required) with the relevant employee as to why the role is being made redundant and explore options to keep the employee in the business. Reasons for voluntary redundancy Each company has their reasons for wanting to offer voluntary redundancy. From an employer’s perspective, offering voluntary redundancy may save them the hassle of making the difficult decision of deciding which roles and team members to make redundant if the circumstances of the business are such that the role is no longer needed. It will also minimise the impact on morale and productivity and may prevent any lingering bad blood between the organisation and employee, both of which could have a negative influence on client and staff relationships. However, it is important to note that voluntary redundancy is not a way to avoid paying for redundancy payments, if applicable, and other entitlements owed to the affected employee. Payment of entitlements is still required. Voluntary redundancy payment The National Employment Standards (NES)  usually set out a minimum redundancy or severance payment for permanent employees based on their length of service, though some awards or registered agreements may have Industry Specific Redundancy Schemes that set out different entitlements.  Although not all employees are entitled to redundancy pay, if they are, it usually depends on how long the employee has been employed with the business, even though it may have changed hands during their employment. Unauthorised unpaid leave generally won’t count when determining the length of service, so keep track of leave. Generally, for an employee to be eligible for redundancy payment, they must have been working with the business for at least one year and the business needs to have fifteen or more employees at the time, including the employees whose roles are being made redundant. However, it is important that you check for any exceptions in the applicable Award or registered agreement as sometimes the employee will get redundancy pay irrespective of their length of service and regardless of the size of the business.   Risks associated with voluntary redundancy If the process is not properly considered or planned, the business risks losing its best and brightest, who may opt to depart in order to cash in on the entitlements and incentives offered. This talent drain occurs because the best and most experienced employees are precisely those who are most likely to obtain jobs in the open market. To avoid this problem, businesses may endeavour to ensure that the voluntary redundancy is targeted at specific classes of employees. However, this may also incur problems as targeting may be considered discriminatory – particularly if the decision is based either directly or indirectly on age or gender. Hybrid redundancy Voluntary redundancy can be incorporated into a traditional redundancy approach. Whilst this may offset some of the benefits, it also mitigates many of the risks associated with targeting. If you would like to engage with this approach you should speak to an appropriately qualified professional. Employee request for voluntary redundancy Should a business wish to consider approaches made by an employee for voluntary redundancy, it is recommended that a formal policy is implemented to ensure consistency and fairness in dealing with each request. While employers are not required to approve each offering for voluntary redundancy – they must be careful about who they approve and how they approve it or else they might be at risk of a claim being lodged against the business. Peninsula can help you understand requests for redundancy and other employee entitlements. Call our team on 1300750491 to learn more. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Redundancy

Retrenchment

The job market is rapidly changing and if you need to know which way it’s heading, you need to look at redundancies and retrenchments. Retrenchments suggest the job market could be softening in some industries. But what exactly are retrenchments? How do they impact your business and industry? In this guide for employers, we outline retrenchments, causes of retrenchments, strategies for business owners, and key factors to remember. Retrenchment Retrenchment describes a situation whereby a role within a business previously filled by an employee ceases to exist. Once the role is redundant, the employer can either redeploy the employee into another role or terminate their employment.   When an employee is terminated due to their role becoming redundant, this is also called retrenchment. Often, when a retrenched employee loses their job, it is through no fault of their own.  These are some common examples of employee retrenchment: A business notices that managing and analysing its data is costly. After exploring alternative solutions, the company realises it is cheaper to outsource its data needs to an external company. Consequently, several data analysts are retrenched and lose their jobs.   A marketing agency is struggling to make a profit. If changes are not made, the company may face liquidation. The agency recently branched out into PR but is struggling to get a foothold in the industry. Management decides to downsize and revert to their earlier business model, retrenching two PR specialists.   Causes of retrenchments The two most common causes of retrenchment are downsizing and operational changes. If a business is underperforming financially, it may need to scale back its operations and reduce overheads by retrenching some staff.  In some cases, a business may not downsize but will still restructure its workforce to make operational changes. For instance, if one of its services is in low demand, a business may make a strategic decision to discontinue that service and replace it with another. In this situation, it is common for roles involved in delivering that service to become retrenched.   Retrenchment strategies for business owners A retrenchment strategy is the process of aggressively cutting business costs to quickly generate an increase in profitability. Retrenchment strategies are normally in the context of a failing business when management and business owners take drastic steps to save a company.   A retrenchment strategy might involve: Selling assets – A business that urgently needs to generate cash flow might sell assets, including equipment or company buildings.  Abandoning markets – If a national or regional market is less profitable than others, a company may choose to stop operating in it Discontinuing products and services – If a particular product or service is underperforming, a business may discontinue it.   Outsourcing – Sometimes it is more financially sustainable to outsource certain business functions, rather than perform them internally.  Workforce restructuring – Businesses often decide which roles they can operate without and retrench any unneeded workers. Ethical retrenchment   Sometimes in struggling businesses retrenchment is unavoidable. However, if your business is forced to retrench employees, make sure you do it ethically.  Employers who engage in socially responsible restructuring or retrenchment report increased productivity and improved trust. A socially responsible retrenchment process will follow these simple steps: Step 1: Use fair selection criteria to decide which positions are to be retrenched. Be sure to communicate any criteria to all staff for transparency. Step 2: Calculate how many members of staff will be retrenched.  Step 3: If the number of retrenched workers is over 15, the Fair Work Act 2009 demands that you give formal notification to Services Australia. Services Australia will contact the Department of Education, Skills, and Employment to make them aware of the retrenchments. If the number of retrenched workers is less than 15, it is still advisable to contact Services Australia. Step 4: The Department of Education, Skills and Employment has a transition support network that will provide employment assistance and financial advice to your retrenched workers. In some cases, Employment Services will organise a support services session to answer questions and give advice directly. Redundancy pay When an entrenched employee’s job is made redundant, the employer may need to meet redundancy pay entitlements (also known as severance pay). Retrenchment minimum notice period You must notify the retrenched employee in writing and give them the correct notice period (or payment in lieu of notice). Employers who fail to give adequate notice might be in breach of: A modern award. An employment agreement. The National Employment Standards (NES). A common law employment contract. Retrenchment vs genuine redundancy Terminating an employee because of retrenchment does not automatically make it a genuine redundancy. In most cases, the employer will need to have an accepted reason. If a retrenchment is proven to not be a genuine redundancy, the employee might be able to make a claim for unfair dismissal. To prove that a retrenchment is a genuine redundancy, an employer might have to provide evidence such as: Restructuring plans. A new organisational chart. Financial records showing a business’s losses. Create fair workplaces with Peninsula Being a business owner and employer means dealing with tough aspects of employee management like retrenchments or redundancies. While you must do what needs to be done for your business, it's also important to follow ethical and fair procedures. Your duty is to ensure your business survives and your employee feels heard and acknowledged. Following a fair procedure will also protect your business from any potential unfair dismissal claims or penalties. Peninsula has worked with thousands of business owners in Australia and supported them in crucial matters of employment relations and health and safety. We can provide end-to-end solutions that empower business owners and employers to grow their business. Call our expert team for free initial advice. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Redundancy

Redundancy Process

Sometimes an employer will no longer require an employee’s job to be done by anyone due to changes to the operational requirements of the business. This is known as a redundancy. Employers should have a valid reason for making the decision to make an employee redundant and may be required to follow a redundancy process to implement the redundancy. The reasons for redundancy can be the result of introduction of new technology, changes to the market (i.e. lower sales or production), changing operational demands such as automated processes, as well as the general need to increase efficiency and reduce costs of doing business. A redundancy is only exempt from unfair dismissal when the redundancy is genuine. Consulting with employees You are required to consult with the employee before ending their employment as per the terms of the applicable award or registered agreement. If your employee is not covered by an award or registered agreement, there may be no requirement to consult. Consultation usually involves notifying the employees of the proposed change to their employment, invite them to a meeting to further discuss the matter, and taking any suggestions the employee might offer to keep their job into consideration before making a final decision. As part of the consultation process, an employer is usually required to offer the employee that the employee can reasonably do any vacant job within the business or an associated entity. Consultation (Warning) Typically, consultation commences with an informal discussion with an employee outlining that the business is considering making that person’s position redundant and that their job is ‘at risk’. Following this discussion, the employer should give the employee an invitation in writing to a formal meeting to discuss the possibility of redundancy in more depth. The invitation should notify the affected employees of the proposed changes, provide them with details and outline the possible effects. The second consultation meeting should be scheduled at least 24 hours after the invitation is given to allow the employee to consider their position and come up with suggestions that will allow them to keep their job.  They may also need that time to seek professional advice or organise a representative or support person to attend the meeting with them. It is a good idea to keep a record of any invitations to redundancy meetings and follow each meeting up with a written summary. Consultation (Subsequent) At the second meeting, the employer would provide the employee with more information about the proposed redundancy. The employer and the employee should explore any options to avoid or minimise the impact on the employee, including any possibility of re-deployment to another position within the business or an associated business, and any alternatives which may save the employee’s job. What amounts to a reasonable deployment depends on the facts of the case and advice should always be taken on specific circumstances. In many cases, to properly satisfy its obligations, a business may be required to meet with the affected employee to consult on more than one occasion. Confirmation The employer should be seen to seriously consider any suggestions that the employee or their representative may raise in the formal consultation meeting before making a final decision. If, after a fair process has been conducted, it is determined that the outcome will be redundancy, a final meeting should be convened. Again, a formal invitation should be issued to allow the employee time to organise representation or a support person to attend with them. At that final consultation meeting, the employer should deliver a preliminary outcome. Following confirmation of redundancy, a formal outcome letter confirming the redundancy, also known as a letter of redundancy, should be issued to the employee. Preparing redundancy outcome documentation The outcome letter should confirm 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. Redeployment As part of the consultation process, you should consider is whether you can redeploy any workers to another role within the business or an associated business. This can mean moving a staff member to another workplace or moving an employee from one role to another. Doing so means the employee may be able to fulfil a needed role elsewhere and retain their employment. The employer may need to provide evidence of the steps they have taken to identify other positions that the employee could reasonably do if there is doubt the redundancy is genuine. When considering redeployment, the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard in order to hit the ground running or else with reasonable retraining. The location and the level of remuneration of the alternative position also need to be reasonable, but the employer should still offer any lower-paid roles with less responsibility or positions located elsewhere to the employee for their consideration. Final pay and notice The National Employment Standards in the Fair Work Act 2009 generally provide the minimum entitlements in respect of notice of termination and redundancy pay for employees covered by the national workplace relations system, however some modern awards and enterprise agreements may provide employees with more or less beneficial entitlements in respect to both notice and redundancy pay, particularly in circumstances whereby  if there is an industry specific redundancy scheme. When ending employment because of redundancy, you need to give the employee written notification of the day of termination, and you need to provide adequate notice or make payment in lieu usually depending on how long the employee has been employed in the business. The minimum notice period in the National Employment Standards (NES) is based on how many years your employee has worked in the business (continuous service). Notice is paid at the employee’s full pay rate as if they had worked the minimum notice period, so the notice can include incentive-based payments and bonuses, loadings, allowances and overtime or penalty rates. If an agreement or employment contract, modern award or enterprise agreement stipulates a longer notice period,  this will prevail. On top of this, it is important to know that if an employee becoming redundant is over 45 years old and has worked within your business for at least two years, they may be entitled to an extra week’s notice, depending on the applicable award or registered agreement. The employee’s final pay will include the payment of any outstanding wages, accrued entitlements that such as annual leave and annual leave loading if applicable, and possibly other payments such as long service leave, payment in lieu of notice, and redundancy pay. Most awards require you to give a departing employee their final pay within 7 days of their employment ending. Some awards and registered agreements may provide a longer or shorter timeframe.  Peninsula can help businesses and employers with staff entitlements, performance management, and essential HR processes. Contact our team to learn how we can support you. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

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