Redundancy is a part of everyday business; It happens and can often be hard to stomach. The fact is that most people may go through this process at some point in their working life. Many employers struggle with issues around redundancy and it is important to remember positions are made redundant, not people! Redundancy occurs when an employer no longer requires the job to be performed by anyone or becomes insolvent or bankrupt. If you don’t follow the employment obligations properly, businesses could be held liable by the Fair Work Commission.
According to Fair Work, Redundancy happens when an employer either:
- doesn’t need an employee’s job to be done by anyone, or
- becomes insolvent or bankrupt.
Redundancy also happens when the business:
- introduces new technology (e.g. the job can be done by a machine)
- slows down due to lower sales or production
- closes down
- relocates interstate or overseas
- restructures or reorganises because a merger or takeover happens.
Some employers find it difficult to deal with the emotion of confronting an employee who is underperforming and so, they decide to go down the redundancy path as it is less of a burden on them. However, the easy option could pose a significant financial risk should the right processes not be followed.
Employers can easily fall into the trap of using the wrong term ‘redundancy dismissal’ when their motive is to dismiss someone for poor performance or misconduct reasons. It is important to ensure that any dismissal is properly classified. ‘Dressing up’ a termination for underperformance or conduct may lead you into trouble. When a dismissal is genuine, the employee cannot make unfair dismissal.
At Key Business Advisors, we understand that having the hard conversations with staff can be an emotional and complex process. We want to take the ease out of these difficult conversations by informing our clients on the right steps to carry out a lawful and genuine redundancy process. Taking the necessary steps will not only protect your business against potential legal claims, such as breaches of the award, unfair dismissal or adverse action, but it will also give you peace of mind knowing you have followed the correct process.
Our HR Advisors will review if:
- the redundancy is legitimate/genuine
- you have proof of restructure requirements/downturn
- you followed the award/EBA requirements regarding workplace change
- the clauses in their contract/award or EBA on redundancy
- have given the right amount of notice
- pay out any entitlements
- any related entities the employee can be redeployed
Our Redundancy Services include:
- Communicate your decisions to the employee/s who may be affected
- Providing information to the employee/s about the changes and when its likely to happen
- Discussing steps to avoid conflicts
- Protecting the business against potential legal claims
- Discuss potential re-deployment opportunities
At Key Business Advisors, we understand the complexity that comes with redundancy and the struggle many business owners go through when making tough decisions. We are dedicated to providing the best possible solution for you and your staff and may even be able to offer alternative solutions to avoid the redundancy process all together. Speak to our HR consultants to know about our redundancy services.
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KBA is known for offering exceptional client support. You will have a dedicated HR Consultant, who will take the time to understand your business and propose HR strategies that best align with your company goals and values. Book your Free 15 Minute Consultation with our HR Experts today and make sure you’re compliant.Book here