As the New Year starts, employers make yearly plans and review labour requirements. As part of the review, there are instances where an employer would need to unfortunately cut labour costs, and make redundancies within the business.
Generally, the following checklist will assist when making redundancies, to ensure legislative requirements are complied with, and potential risks are minimised.
1. If the employee is covered by an Award, refer to the Award derived consultation obligations.
2. As soon as a decision for restructure or potential redundancies is made, notify the employee(s) affected in writing, requiring them to attend a meeting to discuss restructuring of their position.
3. During the discussion, provide information about the potential redundancy, reasons for the redundancy, expected impacts on the employee’s position, and relevant timetable of the redundancy process.
4. Provide the employee with an opportunity to raise any matters on the proposed redundancy, ask questions, or discuss possible alternatives including redeployment (if available within the business).
5. Consider the employee’s comments, and provide a response.
6. Consider whether there are any genuine options for redeploying the employee in a suitable alternative position within the business.
7. Advise the employee on the final decision on whether their position will be made redundant.
8. If the employment is terminated as a result of the redundancy, ensure any outstanding pay and statutory entitlements are correctly calculated and subsequently paid upon termination.
9. Provide a letter confirming the termination to the employee and keep detailed notes on file.
The facts of the individual circumstance may require further processes along the way. However, employers should ensure that appropriate consultation occurs and the employee is kept informedduring the process.
At times, an employee made redundant may hold a grudge against the company. We have clients seeking assistance and representation in unfair dismissal claims they are faced with. A lot of these claims are preventable or the associated risks can be minimised.
If you have concerns relating to any of the above issues, contact the Better HR HR Team.
21 January 2019