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.
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 us 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.