It is an unfortunate result of our current economic times that some employers are being forced to make redundancies. There are various risks attached if the process isn’t fair and in accordance with the relevant legislation.
Most Awards provide a legal obligation for employers to consult with employees prior to redundancies occurring.
If an employer does not appropriately consult, then Fair Work may find that an employee has been unfairly dismissed. The Fair Work Act specifically states that a redundancy is not bona fide if the employer fails to properly consult.
Merely announcing to the workforce that redundancies will occur and then advising of the amount of redundancy pay that employees will receive is not proper consultation. Matters for consideration include:
- The employer must be able to demonstrate that the selection criteria used to determine which employees are to be made redundant is fair, objective and non-discriminatory
- Individual employee circumstances must be taken into account.
- Selection process may be performance based. However, it is not fair to make an employee redundant because of lack of performance when the employer has never counselled or warned the employee in relation to poor performance in the past.
- Procedural fairness must be afforded to employees during the process.
- The redundancy process and policy should be clearly documented and made available to employees in advance.
- Employees should be given the opportunity to discuss the proposed redundancy and to put their case as to why they should not be made redundant.
- Re-deployment should be explored.
In a case concerning a news reader, who was advised of her redundancy on the day and given no forewarning, Senior Deputy President Williams found that the employer deliberately disregarded its obligation to consult. To fulfil the consulting requirements, the employee must be given a bona fide opportunity to influence the decision maker.
Redundancy is not a straight forward process and the obligation to consult carries legal ramifications if it is ignored. Redundancies should be carefully considered prior to action being taken and properly documented.
We can advise you of your legal obligations, prepare the necessary policies, procedures and checklists, and assist you in satisfying the law if you need to make employees redundant.