Bosses turning to strategic redundancies

by 11 Jun 2010

Employers are resorting to making redundancies rather than have difficult conversations with staff about poor performance, according to a workplace law expert.

In a presentation at the Annual Labour Law Conference in Sydney, Harmer's managing partner, Joydeep Hor, said strategic redundancies were being used as a way of ‘making the problem go away’.

''The comment I heard from a client the other day and which I hear quite commonly is 'we're trying to structure this termination as a redundancy','' he said.

''It's seen as a way of avoiding difficult conversations about an employee's performance or dealing with a breakdown in the relationship between an employee and a manager. It also avoids the possibility that the worker will turn around and say 'no, it's your fault for being a bad manager,' or 'you didn't train me properly'. That's a conversation most employers will go a long way to avoid having.'''

Hor added that redundancies often worked in the employer’s favour as the money they spend on the payout is typically covered by the savings on the employee’s salary.

''If you can make someone earning $130,000 redundant and then shift their responsibilities onto someone from the same team who's on $80,000, you're still going to come out on the right side of the balance sheet.

''Even if it's quite a substantial payout, the saving in wages will cover that very quickly.''


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