Redundancy landscape a new ballgame

by 08 May 2012

Employment law experts are issuing a warning to employers considering redundancy layoffs in the wake of new economic uncertainty; you cannot simply ‘rinse and repeat’ old processes.

Employment law specialist Lisa Berton said that with the current economic climate, companies are once again faced with possible redundancies and must ensure they have updated their procedures to be in line with the Fair Work Act. Berton said that the wave of GFC redundancies were made under the old Workchoices legislation and “[employers must now] ensure they aren’t relying on redundant legislation and outdated practices.” The Fair Work Act was introduced in mid-2009, yet many employers haven’t updated their policies despite the different requirements and expanded employer obligations.

To prevent unfair dismissals and landing in hot water, a dismissal is not considered unfair if it is for reasons of ‘genuine redundancy’, and an employer must:

  • No longer require the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
  • Comply with any obligation in a Modern Award or Enterprise Agreement to consult about redundancy; and
  • Show that it would have not been reasonable to redeploy the employee within the employer’s enterprise or within an enterprise of an associated entity of the employer

Notably, Fair Work Australia has clarified that genuine redundancy can be offered where the employee’s duties under the previous job still exist, but are able to be redistributed to other existing employees. The redistribution of duties is a common occurrence when redundancies are made due to economic uncertainty, Berton said.


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