As an employer, you must understand your rights and obligations when it comes to making an employee's position redundant, as a failure to meet your obligations may expose your business to an unfair dismissal claim.
In order to minimise the risk of an unfair dismissal claim, there are a number of factors that need to be considered when making an employee’s position redundant, including:
In order to comply with your legal obligations, you must ensure the redundancy is a ‘genuine redundancy’.
The Fair Work Act 2009 (Cth) sets out that a dismissal is a ‘genuine redundancy’ when:
Most modern awards and enterprise agreements have a consultation process that must be applied when there are major changes to a workplace, which may affect the employment of an employee or a group of employees. For example, the restructuring of a business would be a major workplace change, which may have effects on employees as it may lead to redundancies.
It is imperative that you follow this process and consult with affected employees as soon as possible after making a definite decision to implement the changes, as a failure to consult may expose your business to an unfair dismissal claim.
Where feasible, employers are required to redeploy affected employees within the organisation or the enterprise of an associated entity. This extends to other divisions or interstate operations of the business, if reasonable under the circumstances.