Redundancies: Getting It Right During Challenging Times

October 5, 2026

By Allyson Fletcher
October 5, 2026 Business Improvement Human Resources News

Australia’s labour market is showing signs of change. According to the Australian Bureau of Statistics, the national unemployment rate increased to 4.6 per cent in August 2026, which equates to 14,836,600 people unemployed. This is the highest level of unemployment since November 2021. In Victoria, the unemployment rate was higher at 5.2 per cent. As of late September, the RBA also announced a further interest rate increase, taking the current interest rate to 4.6%. As economic conditions evolve, many businesses are reviewing their workforce structures and operational requirements.

Many businesses across Australia, particularly in Melbourne, continue to face economic pressures. For some organisations, recovery from the disruption caused by COVID-19 in 2020 remains ongoing. With the Victorian State Election also approaching in November 2026, some businesses are adopting a cautious approach to investment and workforce planning amid continuing economic uncertainty.

While redundancies can be a legitimate business response to changing operational needs, employers must ensure that any redundancy is genuine and supported by procedural fairness. The focus should always be on the role no longer being required, rather than the individual performing the role.

A genuine redundancy generally requires that the role is no longer needed due to operational change, consultation obligations are met, and reasonable redeployment options have been considered.

Meaningful consultation is one of the most important aspects of procedural fairness. Employees should be informed of proposed changes, provided with relevant information, invited to ask questions, and given an opportunity to suggest alternatives before decisions are finalised.

Where selection decisions must be made, employers should apply objective and defensible criteria. Redundancy processes should never be used to address performance, conduct or interpersonal issues.

An often-overlooked aspect of restructures is psychosocial risk. Redundancy processes can create stress, uncertainty, anxiety, fatigue, workplace conflict, and reduced morale for both affected employees and those who remain with the organisation.

Employers have a responsibility to identify and manage psychosocial hazards. Risk mitigation strategies include transparent communication, genuine consultation, access to Employee Assistance Programs, offering support persons during meetings, providing outplacement services, and monitoring workloads following organisational change.

Organisations should also recognise the impact on employees who remain after a redundancy process. Open communication, leadership visibility, wellbeing support and clear expectations can help reduce survivor syndrome and rebuild trust and engagement.

In a business environment where workforce restructuring may become increasingly common, employers who prioritise procedural fairness, consultation, compliance and psychosocial safety are better positioned to protect both their people and their organisation during periods of change.

Not sure if it is a genuine redundancy?

Download our “Is It a Genuine Redundancy?” checklist to help you understand some of the key considerations before proceeding. Download “Is It a Genuine Redundancy?”

Are you considering redundancies and would like to understand your obligations? Contact Key Business Advisors to discuss further.

Call us on 📞1300 4 ADVICE or ✉️Email us: info@keyba.com.au

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