Three Key Considerations Before Making an Employee Redundant

Are you contemplating the redundancy of a position within your business? The fact is, that it’s not as simple as just letting someone go and labelling it a 'redundancy'.

When you’re considering making a position redundant there are several things that need to be handled correctly to ensure that you, as an employer, are complying with the law. In this video I provide 3 key considerations for employers who are contemplating redundancies:

Firstly - The key weapon in defending any claim that arises from an employee’s employment being terminated due to their position being made redundant, is the employer’s business case.

Before undertaking the consultation process, the first question an employer must ask themselves is - Do I have a business case that justifies the redundancy? As part of a proper consultation process, an employer should provide the affected employee with a written summary of their business case. That business case should clearly explain the reasons for the proposed redundancy and the likely impact it will have on the affected employee. If you have a sound and well evidenced business case, then that is one step towards defending any subsequent termination claim.

The second key consideration is whether there are any alternative positions available in your business that you can offer to the employee whose position is being made redundant. It is a requirement of the Fair Work Act that if a business has a position available which the employee has the skills, qualifications and experience to fill, even if it is a lower level position, lower paid position, or casual position, then the employer must offer that alternative position to the employee .

The third key consideration is do you understand the consultation process you need to follow. In most circumstances, we recommend a minimum two meeting process. The first meeting is about explaining the business case to the employee and the potential impact on the employee. The second meeting is then typically about obtaining feedback from the employee, and considering that feedback, before moving to making a final decision.

The redundancy process can be a complicated one, and there are numerous hurdles that the employer must jump over, to get through the process with minimised risk. To understand your obligations relevant to redundancy and the appropriate consultation process, please contact one of our experienced employment lawyers at Aitken Legal.

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