What is a genuine redundancy, and why is it so important to get it right?

Business Development Manager - Employsure - Workplace Relations, Health & Safety - Personal

As we come out of the Covid-19 restrictions here in Central Victoria, hopefully there are some brighter skies ahead for your business.  However, with Jobkeeper potentially coming to an end in the near future do you need evaluate & adjust your staffing levels?  Are you operating at sustainable levels?

If you are considering redundancies, an important aspect you must consider is if the redundancy is genuine. When an employee’s dismissal is a genuine redundancy the employee isn’t able to succeed in the event that they pursue an unfair dismissal claim.

In this article written by Employsure’s Employment Law Specialists we explain what a genuine redundancy is, give some initial tips on redundancy, and answer some extra questions about redundancy.

What Is A Genuine Redundancy?

A genuine redundancy means the employee is being dismissed as you don’t require their role to be filled anymore. A genuine redundancy arises where the employer no longer requires the person’s job to be performed by anyone due to changes in the operational requirements of the enterprise.

A redundancy is not genuine if the employer:

  • still needs the employee’s job to be done by someone
  • could have reasonably, in the circumstances, given the employee another job within the employer’s business (or associated entity)
  • has not followed consultation requirements as provided by the relevant Modern Award or enterprise bargaining agreement (if applicable)

Below are common scenarios in which a redundancy may occur:

  • The business is restructuring
  • New technology fulfils the job obligations
  • The business is relocating or closing down
  • There is a prolonged and significant downturn in business

Why Is It So Important That The Redundancy Is “Genuine”?

If a redundancy is genuine, an employee cannot succeed in the event that they pursue an unfair dismissal claim. When undertaking a redundancy, an employer should ensure that it is genuine.

If you’d like to know more about what to expect if you receive an unfair dismissal claims, why not download our guide on What To Expect When Facing An Unfair Dismissal Claim.

How Do I Avoid Making A Redundancy That Is Not Genuine?

As above, you should understand what a genuine redundancy is, and ensure you are carrying out a genuine redundancy and complying with any extra provisions in the applicable Modern Award or enterprise bargaining agreement.

Note: A redundancy is not genuine if the employer:

  • still needs the employee’s job to be done by someone
  • could have reasonably, in the circumstances, given the employee another job within the employer’s business (or associated entity)
  • has not followed consultation requirements as provided by the relevant Modern Award or enterprise bargaining agreement (if applicable)

 

Is There Anything Else I Need To Know About Redundancies?

There are several things that need to be considered when embarking on a redundancy:

  • All awards and registered agreements have a consultation process for when there are major changes to the workplace, which may include situations such as redundancies.
  • Employers are obliged to consider suitable alternative employment before making the role redundant (if applicable).

 

Minimum Notice Periods

When ending an employment because of redundancy, if the employee is engaged on a permanent basis you need to provide adequate notice or make payment in lieu.

The minimum notice period in the National Employment Standards (NES) is based on how many years your employee has worked for you (continuous service).

An employee will be entitled to an additional week of notice if they are over the age of 45 and have been engaged for at least 2 years.

Minimum Redundancy Payments

The NES also provides for a minimum payment to an employee made redundant based on the number of years of continuous service.

Just remember, not all employees are entitled to redundancy pay. The following employees don’t get redundancy pay:

  • employees whose period of continuous service with the employer is less than 12 months
  • employees employed for:
    • a stated period of time
    • an identified task or project
    • a particular season
  • employees fired because of serious misconduct
  • casual employees
  • trainees engaged only for the length of the training arrangement
  • apprentices
  • employees of a small business

 

Are There Are Any Alternatives To Redundancy?

There are a few alternatives available to employers. We have put together a FREE guide explaining some of these alternatives, which you can download here.

Before making any bold steps around your staffing levels it’s best to make sure you are compliant in your actions.

For more information and a local Central Victorian contact please feel free to reach out to me.

Tim Burnham

0427 439 344 or tim.burnham@employsure.com.au

Tim Burnham

Business Development Manager - Employsure - Workplace Relations, Health & Safety - Personal

Servicing the Central Victorian region, Employsure gives Australian business owners confidence that their workplaces are safe, fair and compliant.
Our subscription service does this by offering the advice, support and documentation you need to manage the complexity of workplace relations and workplace health and safety.
We can provide a complete service of generating Employee Contracts, Manuals, Handbooks, Policies and Procedures, Provide on-going day/night advice to your specific situations, Legal Representation and Protection against damages. In addition with have an App based service to help you manage communicating your policies and procedures with your staff.
For a local connection, Call Tim on 0418282983.

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