News by JP Smith Toowoomba

News

01 March 2015

The "must knows" of planning redundancies

Current economic realities have seen many businesses reducing staff numbers and restructuring around general downturns in profitability.

Some organisations use attrition to reduce staff – a practice of restructuring roles and responsibilities around a departing employee as opposed to recruiting for the role.

Others, without the benefit of exiting staff, have to contemplate offering voluntary or even forced redundancies to ensure the long-term viability of their enterprises.

WHAT IS REDUNDANCY?

A job or role becomes redundant when the employer no longer requires the role to be performed by anyone due to changed operational requirements. This is often caused by a significant reduction in demand for products or services offered by the business.

There are specific legal requirements to be met before a business can undertake redundancy measures and once started, there are specific processes that need to occur to ensure outgoing staff are treated fairly and given opportunities to re-enter the workforce.

Some of the requirements include:

  • Redundancies must be genuine.
  • Award/Enterprise Agreement/Modern Award conditions must be complied with.
  • Redeployment within company or an associated entity must be offered, if reasonable to do so.
  • When choosing which employees to make redundant, the decision must be based on neutral factors such as performance, skills/abilities, last-on first-off, licensing requirements in the industry (such as retaining sufficient licensed operators to continue operations) – discriminatory factors cannot be used.
  • Consultation obligations must be met.
  • Other compliance measures, such as notifying specific agencies where 15 or more employees are to be made redundant.
  • Rules surrounding casual employees who worked regular or systematic hours.
  • Notice periods.
  • Written notification to affected employees including details of how their role was made redundant and how their termination payment was calculated.

Navigating a successful redundancy strategy requires expert Human Resources knowledge. Businesses that do not have dedicated HR staff can seek advice and facilitation support from specialist practitioners who will ensure all employee rights and employer obligations are complied with. A reputable practitioners will also assist in ensuring communication with employees before, during and after redundancy measures has a minimal impact on remaining staff productivity and morale.

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