Redundancy - Genuine or Not?

Being made redundant can be a disappointing, emotional, and confusing experience. Unfortunately, redundancy is sometimes a natural course of business, resulting from a variety of factors such as business restructuring, or a downturn in business. Alternatively, employers can use it to remove employees from their employment section. As such, it is important for both an employer and employee where any redundancy is carried out, for the action to be considered “genuine” and conducted lawfully. 

Redundancy put simply, can occur when an employer either doesn’t need an employee’s job to be done anymore (by anyone) or the employer becomes insolvent or bankrupt. In either case, the redundancy needs to be genuine.

Redundancy is often not genuine if:

1. The employer still needs someone to complete the employee’s role, i.e., re-advertises the position or employees someone new.
2. The employer has not followed the requirement to consult with the employee about the redundancy under an award or employment agreement.
3. The employer could have reasonably given the employee another job within the business or company.

An employer must follow any consultation requirements in the award, enterprise agreement, or other registered agreement that the employee is covered under. Consultation requirements include things like:

1. Notifying the employee about the proposed changes and how these changes may be affecting the employee.
2. Discuss any steps that the employer will take to reduce the effect on the employee, such as redeployment.
3. Allowing the employee to respond with ideas or suggestions.

There are also various pay and entitlements that employees may be entitled to upon a genuine redundancy. Whether an employee is entitled to redundancy pay is reliant upon several factors such as the employee’s award, enterprise agreement or other registered agreement, age, type of employment, the employer, and length of continuous service.

If an employer is not seen to have followed the necessary steps and/or has not paid the necessary entitlements, then the redundancy may not be considered genuine, and an employee may have a claim against the employer.

If an employee thinks they may have a claim, they must get in touch with a solicitor as soon as possible as there are strict time limits, often 21 days, for bringing a potential claim forward. For advice relating to redundancy, please contact one of our experienced Employment Lawyers on (07) 4052 0700 to discuss.