Redundancies: Understanding Your Options

As businesses attempt to navigate, survive and recover from the COVID-19 crisis, employers are forced to make a number of difficult decisions to ensure economic viability. For many, this may require redundancies.

For small business employers or organisations who received the JobKeeper subsidy, it is important that they undertake the relevant consultation requirements and plan ahead by determining their position well before JobKeeper ends.

As of recent, the most commonly asked question amongst employers is ‘how do we keep redundancies genuine?‘

In order to successfully classify a termination as a genuine redundancy, section 389 of the Fair Work Act 2009 (Cth) requires:

1. that an employer no longer requires the employee’s job to be performed by anyone due to changes in the operational requirements;
2. that the employer complied with any obligation in a modern award or enterprise agreement to consult about the redundancy; and
3. that it would not have been reasonable in all the circumstances for the person to be redeployed within the employers enterprise or the enterprise of an associated entity of the employer.

Operational Requirements 

Operational changes can be due to a range of factors including changes in processes or corporate structure, financial pressures, a temporary downturn in business or the need to improve efficiency. It is important to note that the position must genuinely not be required at the time that the decision to implement a redundancy is made by the employer.

Consultation 

The Fair Work Act requires the employer to fulfill obligations under an award or agreement if the dismissal is to be considered a genuine redundancy. However, if there is no modern award or enterprise agreement that applies, there is no legislative requirement to consult about the redundancy before a decision is made to make an employee redundant.

Nonetheless, Antunes Lawyers would advocate a relatively cautious approach and would recommend that all employers regardless of size and Modern Award applicability, consult their employees.

Redeployment

It must be satisfied that there was actually an identifiable job, position or other work to which the employee could have been redeployed having regard to:

• the nature of any available position;
• the qualifications required for the position;
• the employee’s skills, qualifications and experience;
• the location of the position in relation to the employee’s residence; and
• remuneration offered.

What can we do for you?

Antunes Lawyers have decades of combined expertise in employment law and can equip you with the right advice, support and information to ensure that you make informed decisions about your employees. Contact our professional team for a no-obligation consultation.