A common HR mistake made by employers is misunderstanding what a genuine redundancy is.
What is a genuine redundancy?
As set out at www.fairwork.gov.au, a genuine redundancy occurs when:
- the person’s job doesn’t need to be done by anyone
- the employer followed any consultation requirements in the award, enterprise agreement or other registered agreement.
When an employee’s dismissal is a genuine redundancy the employee isn’t able to make an unfair dismissal claim.
A dismissal is not a genuine redundancy if the employer:
- still needs the employee’s job to be done by someone (eg. hires someone else to do the job)
- has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or
- could have reasonably, in the circumstances, given the employee another job within the employer’s business or an associated entity.
Workplace redundancies shouldn’t be seen as an opportunity to remove ‘dead wood’ and should instead only occur in scenarios when, for instance, a restructure or takeover occurs, relocates, shuts down, needs to make significant changes due to business slow down, or the role is replaced by a machine.
To repeat, a genuine redundancy should only occur when the job doesn’t need to be done by anyone, NOT because they are unsuitable for the role.
Requirements for Consultation
The redundancy may also not be considered genuine if the employer didn’t follow their specific requirements for consultation regarding the redundancy. Check back to our previous blog for an overview of consultation obligations for small businesses.
A redundancy could also not be considered genuine where the employee could have reasonably been offered another job within the business (or related entity). This means that in many cases if, for example, there is an interstate opening for a job within your business that the employee, potentially facing redundancy may be suitable for, that they should be considered for this interstate position, as opposed to simply assuming that the employee wouldn’t want to relocate.
Working through redundancy obligations can be challenging, especially when you’re emotionally attached to the business and staff. Talk to our Workplace Partners to get specific support for your business circumstances.