In a world that is focused on increasing productivity by implementing technology and machines, businesses in Australia are reconsidering the need for the roles that once played an integral part in business. This theme is threatening the continuing employment of many positions in industries that are no longer crucial to a business’ daily operations.
Whilst this is common, many employers are still failing to meet their obligations when making positions redundant.
To be lawful, a redundancy must meet the requirements of a “genuine redundancy” under the Fair Work Act 2009 (Cth).
A genuine redundancy generally occurs when the following 3 requirements are met:
- The employer no longer requires the job to be done;
- The employer has consulted with the affected employee; and
- It was not reasonable for the employer to redeploy the employ in an alternative position within its business.
If a business is satisfied that they have met the criteria of a “genuine” redundancy, it must then determine if the employee is entitled to redundancy pay. It must also calculate the standard entitlements of the employee such as notice, unpaid wages, annual leave and long service leave.
If an employee believes that they were terminated on the basis of a non-genuine redundancy, or that they didn’t receive the right termination payment, they may make an application to the Fair Work Commission. This is costly to the employer and a hindrance to daily business operations.
The rules surrounding redundancies are complicated. It is crucial that employers consider their obligations under the relevant laws and proceed with caution before making any decisions regarding employment to avoid incurring unnecessary and preventable legal costs to defend a claim.