What Is Redundancy?
A redundancy occurs when an employer decides that an employee’s job is no longer required due to changes in the operational needs of the business. Under the Fair Work Act, a redundancy is only considered genuine when the role itself disappears, the employer has consulted the employee as required by any applicable award or agreement, and all reasonable redeployment options have been explored.
Redundancies typically arise from changes such as new technology, reduced demand, restructuring, automation, or the need to improve efficiency and reduce business costs. In these situations, employers may need to follow a formal redundancy process to ensure the decision is lawful and compliant.
A redundancy is not genuine if the role still exists, if consultation obligations are ignored, or if the employer fails to consider suitable redeployment opportunities within the business or associated entities.
How the Redundancy Process Works in Australia
The redundancy process in Australia requires employers to follow a formal, Fair Work‑aligned sequence before ending employment. This includes identifying a genuine redundancy, consulting with the employee under any applicable award or agreement, exploring reasonable redeployment options, and issuing the correct documentation such as meeting invitations, outcome letters, notice of termination, and final pay details. Employers must ensure each step is lawful, transparent, and compliant with the Fair Work Act and modern award consultation requirements.
Redundancy Process Step‑by‑Step (Employer Guide)
The redundancy process involves a series of Fair Work‑aligned steps employers must follow before ending employment. The guide below walks you through each stage, from identifying a genuine redundancy to consultation, redeployment, and final pay.
Step 1: Identify Genuine Redundancy
Confirm the role is genuinely no longer required due to operational changes such as restructuring, reduced demand, or new technology. A redundancy is genuine when the role disappears, not when the employer replaces the person or rehires into the same position. Employers should document the business reasons (financials, restructure plans, organisational charts) to show the decision is based on operational need.
Step 2: At‑risk notification
Inform the employee that their role is “at risk” and consultation will begin. This typically occurs on Day 1, with written confirmation sent the same day or within 1-2 business days to formally record the discussion.
Step 3: First consultation meeting
Explain the proposed changes, why the role may be redundant, and invite initial feedback. The employee may bring a support person (colleague, union rep, or support worker), and employers must genuinely consider any suggestions to avoid redundancy.
Step 4: Written invitation to formal meeting
Provide a formal written invitation to the second consultation meeting outlining the proposed changes, potential impacts, and the employee’s right to a support person. This ensures transparency and compliance with award or agreement consultation requirements.
Step 5: Second consultation meeting (24+ hours later)
Hold the second meeting at least 24 hours after the invitation so the employee has reasonable time to prepare. This timing reflects Fair Work’s requirement to give employees a genuine opportunity to consider the proposal and present alternatives. If you’re unsure, a Peninsula dedicated HR Consultant can attend and support you throughout the meeting.
Step 6: Explore redeployment options
Assess whether any suitable alternative roles exist within the business or associated entities. Document all roles considered and offer any roles the employee could perform with minimal or reasonable retraining. If no suitable roles exist, or the employee refuses a suitable role, the redundancy may still proceed. If the employee refuses a suitable redeployment option, the redundancy can still proceed, and the employee remains entitled to redundancy pay.
Step 7: Final consultation meeting
Meet with the employee to deliver the preliminary outcome after considering all feedback and redeployment options. If redundancy is confirmed, explain the next steps including notice, entitlements, and when the outcome letter will be issued.
Step 8: Outcome letter
Issue the formal redundancy outcome letter within 1–2 business days of the final consultation meeting. The letter confirms the decision, outlines the reasons, summarises consultation, and provides the employee’s final day of employment.
Step 9: Notice period + final pay
Provide notice in line with the NES, award, or agreement, or pay the employee in lieu of notice. Final pay must be provided within 7 days of termination and include outstanding wages, accrued leave, redundancy pay (if applicable), and any other entitlements.
Redundancy Consultation Timeline
| Stage | Employer Action | Typical timing |
|---|---|---|
| Position at risk notification | Employee told job is at risk | Day 1 |
| First consultation meeting | Discuss proposed changes | Day 1 |
| Written invitation | Formal invite to a second meeting | Day 1 |
| Second consultation meeting | Employee gives feedback | 24+ hours after Day 1 |
| Redeployment assessment | Employer checks alternative roles | Day 2–5 |
| Final consultation meeting | Preliminary outcome delivered | Day 3–7 |
| Outcome letter | Formal redundancy confirmation | Same day |
| Notice period | NES or award-based | Varies |
Redeployment Options (Employer Obligations)
Employers must explore whether the employee could reasonably perform another role before confirming redundancy. This includes checking available positions across the business and any associated entities and documenting the assessment.
What counts as “reasonable” redeployment
A role is reasonable if the employee can perform it with their existing skills or with minimal retraining, and if the location or travel requirements are practical.
Evidence employers should keep
Keep records of all roles reviewed, why each role was or wasn’t suitable, and any discussions with the employee. This shows the employer genuinely explored alternatives before confirming redundancy. Employers should record how skill‑matching was assessed, any retraining considered, and why each role was or wasn’t suitable.
Lower‑paid or alternative roles
Employers should offer any role the employee could reasonably perform, even if it’s lower‑paid or outside their usual duties. If the employee refuses a suitable role, the redundancy can still proceed. (Aligns with redundancy redeployment, reasonable redeployment redundancy.) A redeployment option can still be reasonable even if it is lower‑paid, has different hours, or sits at a different classification level.
Redundancy Outcome Documentation Checklist
Employers must keep clear, written records throughout the redundancy process to demonstrate compliance with the Fair Work Act and any applicable award. This documentation supports transparency, protects the business if the decision is challenged, and ensures all steps are properly recorded.
At-risk letter: A short written confirmation that the employee’s role is “at risk” and consultation has begun. It records the initial discussion and sets the foundation for the formal process.
Meeting invitations: Formal written invitations outlining the purpose of the meeting, proposed changes, and the employee’s right to bring a support person.
Meeting summaries: Brief written notes summarising discussions, feedback, and agreed actions to demonstrate genuine consultation.
Redeployment evidence: Documentation showing which roles were reviewed, why each role was or wasn’t suitable, and any discussions with the employee.
Outcome letter: A formal letter confirming the redundancy decision, reasons, and final day of employment.
Notice of termination: Written notice outlining the employee’s notice period under the NES, award, or agreement.
Final pay breakdown: A summary of all entitlements owed, including wages, accrued leave, redundancy pay, and any additional payments.
Notice Period & Final Pay
Employers must provide the correct notice and final pay when redundancy is confirmed. These entitlements are set by the National Employment Standards (NES), any applicable award, and the employee’s length of service.
NES minimum notice: The NES sets minimum notice periods ranging from 1 to 4 weeks depending on the employee’s length of service.
Extra week for employees over 45: Employees aged 45+ with at least 2 years of service receive an additional week of notice under the NES.
Redundancy pay: Redundancy pay ranges from 4 to 16 weeks based on continuous service, unless the employer is a small business (fewer than 15 employees).
Final pay timing (7‑day rule): Final pay must be provided within 7 days of termination and include wages, accrued leave, redundancy pay, and any other entitlements.
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.