Getting the redundancy process right

Public news

The consideration of redundancies in the workplace can be one of the most difficult decisions a company may have to make. Genuine redundancies can be required due to lack of work, a drop in sales or a need to restructure the business to ensure operation effectiveness. The definition of a genuine redundancy outlines three important concepts that need to be considered before initiating the process, these are:

  • A redundancy relates to a role (or job) performed within the business, not an individual person
  • During the redundancy process you must consult with affected employees; and,
  • You must consider whether a person being made redundant can be redeployed within the business or any related businesses.
  • Discuss the issue and notify all the employees that are going to be affected by a potential redundancy
  • Provide them with details as to why they will possibly be made redundant
  • Explain what options (if any) have been considered
  • Take note of the employee’s potential suggestions as to any alternatives to redundancy; and
  • Make a proper decision around the redundancy, such as who is to be made redundant, when this is to occur and for what reason. This final point must take place on a separate occasion;
  • Once a decision has been made, inform the employee/s of the decision and provide details on possible redundancy payments and notice amounts.

To avoid any issues we would recommend following the below steps.

Keep in mind that small businesses with less than 15 ‘head count employees’ are not required to make redundancy payments to their staff but are still required to provide correct notice periods set out in the National Employment Standards.

Please contact the MTA Workplace Relations Department by clicking here to discuss any possible redundancies, we can provide advice and documentation to help you work through the steps.