An employee’s position is made redundant when an employer no longer requires that position to be performed by anyone. It is important as an employer that you understand the laws around redundancies to ensure you comply with your legal obligations and minimise the risk of legal proceedings.

Legislation, award, enterprise agreements and at times employment contracts or internal polices, place obligations on employers when making an employee’s position redundant which must be complied with to successfully defend a claim from an employee who has had their employment terminated due to redundancy.

Consultation is important, particularly with employees covered by an award or enterprise agreement. Some employees are entitled to a redundancy payment where their position is made redundant. Understanding what your obligations are as an employer is complex and the consequences of getting it wrong can be costly.

Common mistakes we see with restructuring

  • Not having a sound business case to support the restructure.
  • Not consulting with the employees.
  • Not following obligations set out in the legislation, applicable award or enterprise agreement.
  • Not understanding that it is the position that is redundant and not the employee.
  • Not understanding redeployment obligations.
  • Employing a new employee in the redundant position straight after dismissing an employee due to that position being made redundant.
  • Using redundancy as a reason to dismiss an employee who is not suitable for the position due to performance, conduct or capacity.

Key risks of getting it wrong

Employers who fail to meet their obligations with respect to making a position redundant, may face a disgruntled employee and potentially an unfair dismissal claim, or general protection claim.

Redundancy should not be used as a mechanism to remove an employee who is not suitable for their employment for other reasons.  To do so, increases your risk of the employee having a successful claim against you regarding the termination of their employment.

How can we help you?

Before proceeding to make an employee’s position redundant, speak to one of our experienced Employment Lawyers and let them help you minimise your risks.

We can provide advice on the proposed redundancy; the employee’s entitlements where their employment is terminated due to their position being redundant; and provide a procedure to follow which is tailored to your specific circumstances and will ensure you comply with your obligations.

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