Are you complying with your consultation obligations in a redundancy?

Members are reminded to follow their consultation obligations when dealing with redundancy. Where redundancy is not managed appropriately, it may expose employers to an unfair dismissal claim by the employees. If you are considering making certain positions redundant, make sure the redundancy is a genuine one and follow the consultation requirements under the applicable award or the enterprise agreement (EA).

A genuine redundancy is when:

1. You no longer require the person’s job to be performed by anyone because of changes in the operational requirements of your business (this may be due to the introduction of new technology, lack of foreseeable work, restructuring) and
2. You have complied with any obligation in a modern award or enterprise agreement regarding consultation with the worker.

It is the employer’s responsibility to prove that the dismissal was a genuine redundancy. Therefore, it is important to keep evidence of meetings and emails exchanged regarding the required consultation.

A redundancy will not be deemed genuine if the employer has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement. As a result, the employer may expose themselves to a potential claim for an unfair dismissal.

When do I owe consultation obligation to my employees who may be affected by the redundancy?

Under many modern awards and EAs, a redundancy is considered a major change and therefore requires the employer to undergo genuine consultation with potentially affected employees if:

• the affected employee/s is covered by a modern award or EA; and
• the award and EA require the employer to consult about redundancy.

If there is no award or EA that covers the employee, then the employer is not obliged to consult about the redundancy before a decision is made to make the position redundant. However, it is recommended to seek advice before you begin the process to ensure you are following the correct procedure.

What if I have 10 carpenters but only need 7, is this still a redundancy?

Whilst the definition states that you no longer require the job to be done by anyone, it does not mean that you no longer require that job at all. If you currently engage 10 carpenters but due to a lack of work, you now only require 7. This means 3 of those roles are no longer needed and therefore would be classified as a redundancy, should no suitable alternate work be available.

Need help?

If you have any questions or need assistance about redundancy, please contact our Workplace Relations and Legal Team on 02 6175 5900.