Redundancy occurs when the work performed by an employee is no longer necessary because of an economic downturn affecting the business, technological change, company merger, restructuring, and changes to operational methods. Redundancy does not result from any factors arising from the employee’s conduct or performance.
Deciding which employee to make redundant can often be a difficult process. The recommended approach to adopt, and the approach that has been approved by various tribunals, is for you to select who is to be made redundant by referring to the skills, experience, training and performance of individuals compared to the current and future needs of your organisation.
Once the redundancy decision has been made, we suggest that you make the employee concerned aware of your decision as soon as possible, and that you investigate any alternative options for their continuing employment.
These payments typically do not have to be made to casuals, apprentices, or employees engaged for a specified period of time or for a specified period or task.
Despite having observed the requirements set out above, the termination of a redundant employee may be considered unfair if the procedures associated with redundancy are not properly applied. An example of this is the failure to consult with the employee following the decision to make them redundant. Employees should be warned of the possibility of a redundancy and consulted about the likelihood of losing their job. Employers should also be seen to provide adequate opportunities for employees to seek alternative employment, and where reasonable, the employer should assist in this process.
An employer’s inability to carry out any of these functions may constitute a failure to provide procedural fairness and therefore lead to the redundancy being held to be unfair.
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.
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