Redundancy (Employer)
At SIBLEY LAWYERS we provide timely and accurate advice for both Employers and Employees as to the redundancy process.
Redundancy is when a business no longer needs an employee’s role to be done by anyone. This is very important as it is not the actual employee that is no longer required but the role, the job, the position or classification within the business. Many employers make the mistake of making the employee redundant and then are subjected to claims that it was not a ‘genuine redundancy’ and the employee may seek a remedy imposed by tribunal such as the Fair Work Commission.
What is this thing they call Redundancy?
An when an employer either:
- Does not need an employee’s job to be done by anyone, or
- becomes insolvent or bankrupt.
Also when the business:
- introduces new technology (Automation)
- restructures or takeover happens or reorganises because a merger.
- needs to make reductions to staff due to lower sales or production
- relocates interstate or overseas
- closes down
What are the steps prior to making a job redundant?
A consultation process is mandatory in all Awards and Enterprise Agreements for when there are major changes to the workplace, such as redundancies.
The consultation process sets out the things the employer needs to do when they decide to make changes to the business that are likely to result in redundancies. This must be done as soon as possible after the decision has been made to make these changes.
Consultation steps requirements:
Notifying the employees who may be affected by the proposed changes.
Providing the employees with information about these changes and their expected effects, employees are allowed to be represented during the process.
Discussing steps taken to avoid and minimise negative effects on the employees.
Considering employees ideas or suggestions about the changes.
Does a redundancy need to be ‘Genuine’?
The short answer is YES, a genuine redundancy is when:
- the person’s job does not need to be done by anyone; and
- the employer followed any consultation requirements in the award, enterprise agreement.
When an employee’s dismissal is a genuine redundancy, the employee is not protected from unfair dismissal, the Fair Work Commission has no jurisdiction to deal with a genuine redundancy.
What’s not a genuine redundancy?
When the employer:
- still needs the employee’s job to be done by someone.
- has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement; or
- could have reasonably, in the circumstances, given the employee another job within the employer’s business or an associated entity.
McIlwraith v Toowong Mistubishi Pty Ltd [2012] FWA 9662 (Cribb C, 22 November 2012).
Rosenfeld v United Petroleum Pty Ltd T/A United Petroleum [2012] FWA 2445 (Ryan C, 22 March 2012)
Miller v Central Gippsland Water Authority [1997] FCA 1081 (2 October 1997), [(1997) 76 IR 186].
Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10 (9 March 2005), [(2005) 222 CLR 241].
All these cases were determined to ‘ not be genuine redundancy’ for various reasoning but principally that ‘job was performed by someone’ after the employees were made redundant.
CALL SIBLEY LAWYERS IF YOU ARE AN EMPLOYEE BEING MADE REDUNDANT OR EMPLOYER THAT IS CONSIDERING MAKING A JOB REDUNDANT TODAY.
Other matters to be considered by EMPLOYERS in redundancy
Reducing redundancy pay
An employer can apply to the Commission to have the amount of redundancy pay reduced if the employer:
- finds other acceptable employment for the employee, or
- can’t afford the full redundancy amount.
Employers can only apply to the Commission if the requirement to make a redundancy payment stems from the NES. An employer can’t apply to the Commission if the redundancy entitlements derive from an award or a registered agreement.
Small Business Employer
A small business is one that employs less than 15 employees at a particular time. If an employer has 15 or more employees at a particular time, they are no longer a small business employer. When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis. Most small businesses do not have to pay redundancy pay under the NES when making an employee redundant. Although an example of the exceptions to those small businesses rules are the ones that operate in the building and construction industry.
Redundancy of 15 or more employees
If a business is considering redundancy of 15 or more staff, the employer must give written notification to Centrelink of the proposed dismissals as practicable and before the employee is made redundant.
The notice must set out the:
- reason for the dismissals
- number and categories of the employees likely to be affected
- timing of the dismissals’
Things EMPLOYEES need to know
The National Employment Standard (NES) provides for the redundancy payment amounts if an employee is not covered by an Award or Enterprise Agreement which delivers higher payments. Generally, the amount of weeks redundancy payment will be dependent on the employee’s length of service.
If Employees who lose their job because their employer went bankrupt or into liquidation may be able to get financial help from the Government. The Fair Entitlements Guarantee (FEG) is safety net scheme employer is unable to meet their obligations. If the employer has not entered bankruptcy or liquidation and just refuses to pay redundancy, then FEG does not cover that situation.
Finally, redundancy is taxed differently to other termination payments.
But don't just take our word for it
Our Track Record Speaks for Itself
We don’t just promise results, we deliver them. We’ve secured acquittals, reduced charges, and protected the freedom and reputations of countless clients. But don’t just take our word for it. Read our client testimonials to see what our clients have to say about our dedication, expertise, and results.
FEATURED
Gail Patterson
Professional and thorough
Nurture In Harmony
I highly recommend Sibley Lawyers for anyone dealing with workplace issues, including personal injuries. After my union lawyers refused to support me in a workplace dispute, Justin Sibley and Jack McDonald stepped in and made all the difference. They were incredibly knowledgeable, responsive, and truly committed to my case. Despite the lack of support from my union, to which I had paid fees for 13 years, Justin and Jack worked tirelessly to ensure I was treated fairly and helped me achieve a positive outcome. Their expertise in employment law and genuine dedication gave me the confidence to move forward. If you’re looking for lawyers who will fight for you when others won’t, Sibley Lawyers is the firm to trust!
Lyniece Rostant
Dena Miller
I couldn’t be happier with Sibley Lawyers if I tried. The team is fantastic and passionate about what they do. A particular shout out to their Senior Paralegal, Kate Rasmussen! She has worked tirelessly on several matters for me and achieved positive outcomes. She is always professional, friendly, dedicated and passionate when it comes to her clients. Your determination to obtain justice for me is greatly appreciated Kate 🙏
Madonna Arca
On behalf of my brother Peter:
I was represented by Sibley Lawyers in a Personnel Injury Claim and Jack McDonald worked extremely hard and was very devoted in achieving a great result. He has been extremely professional and very thorough with his ongoing research into my claim. I would high recommend Sibley Lawyers and in particular Jack McDonald.
Hayley Reid
I have needed the services of Sibley Lawyers for a couple of years now. They are extremely thorough, knowledgeable and above all approachable and trustworthy. They have been dealing with my protracted issue that has been handled very professionally and successfully at every turn. When this is all concluded I hope to never need their services again but if I, or anyone I know does, Sibley will be the first call. Thanks team.
Amy Reeve
I have been a Sibley Client since 2021. Justin and his team are very knowledgeable in their legal profession and have provided me the advice and support needed. I had some oustanding pay queires that needed to be resovled with my employer, the Sibley team acted on this very swiftly resulting in a postive outcome for me. I highly reccommend their service.
Brett Rawlings
I’ve been a client with Sibley Lawyers Employment Law Services over the past couple years. They have saved my job and helped me out with certain enquiries and never once have they not cared about their clients. I highly recommend and it is a must. Join up today
Cass Jefferson
Justin Sibley and his team are the consummate professionals in law.
I have used his services as a retained client as a Qld Government employee, as well as being a personal client. Justin always impresses me. When push comes to shove, you need someone like Justin in your corner. Not only does he understand the law and all of its complex mechanics, but he has the ability to win with his attention to detail, unwaivering knowledge and courtroom charisma. As mentioned I Highly Recommend Sibley Lawyers to anyone needing legal representation, they’re a tremendous firm.
Luke Doherty
Sibley law and especially Nick Ware are amazing and I could not recommend a better criminal defence lawyer.
He’s professional, personable and very thorough. Always put my worries and mind at ease with his professional advice and very contactable, not fobbed off to a secretary.
The outcome of what I wanted, happened and I was also upfront and honest from the start with no judgement whatsoever from Nick.
I went into the experience alone and can really say I have come out with a great result and someone I’ll call a mate.
OTher services
Join Our Mailing List
Sign up for our newsletter to receive updates on legal news, firm announcements, and helpful resources.
