As your enterprise grows, you are likely to automate systems and processes. From developments in technology to company restructuring, you may no longer require some of the roles your employees perform. It’s then critical that your enterprise identifies whether you are removing the position or dismissing the employee. We set out below what is a genuine redundancy and how you can protect your enterprise from an unfair dismissal claim.

What is a Genuine Redundancy?

If you don’t intend to hire someone else to replace the employee, and you cannot move them to another position within your enterprise, you will likely need to make the employee redundant. Ensure that you understand the protections the Fair Work Act 2009 offers your staff including the avenue to claim for unfair dismissal or unlawful termination if it is not a genuine redundancy.

How Can I Protect my Enterprise?

Firstly, are you simply trying to rid your business of a poor performing or troublesome employee under the false pretence of redundancy? Unfortunately, this is relatively common, and the Fair Work Commission does not look favourably on employers trying to skirt around by changing the job title or making minor alterations to the job description. You will also need to confirm that there are no other suitable positions or teams at your company that your employee can move into.

If you hire staff subject to an Award, for example, administrative staff, you need to discuss the planned redundancy with them. You should make sure you explain the decision, the consequences and what you’re doing to minimise the harm they will suffer due to the redundancy. Again, you’ll also need to consider whether you can move these staff into a new position or team. If you are unable to do, you must pay out the employee in compliance with the terms of the highest paying agreement they are subject to. This could be their Award Rate, your internal policy, an Enterprise Bargaining Agreement, or their Employment Agreement.

How Much Will I Need to Pay?

As you employ more than 15 people, it is highly likely that you’ll be required to payout your employees on a sliding scale that increases with the employee’s age and time at your enterprise. This starts from four weeks pay after one year with your company.

Key Takeaways

If your business’ needs have changed and you no longer require a staff member to fulfil a particular role, you can make the position genuinely redundant. As the operator of an enterprise, you should ensure that the termination of employment is for a genuine redundancy and that your business no longer requires the position to be fulfilled, rather than no longer wanting the staff member. If you’re looking to remove a particular employee due to poor performance or because they’re not the right fit for your workplace then this is unlikely to qualify as a genuine redundancy, and you should consider whether there are reasonable grounds for termination. Questions? Get in touch with our employment lawyers on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy