If you want to terminate an employee’s employment for reason of redundancy, then you must first be sure that it is a case of genuine redundancy. Otherwise, you might be exposed to an unfair dismissal claim.
So what is a genuine redundancy?
A genuine redundancy occurs when an employer no longer requires a particular job to be performed by anyone as a result of changes in the operational requirements of their enterprise.
Some examples of genuine redundancies include:
- The closure of a site where the employee worked
- The completion of a project the employee was working on
- A need to reduce costs due to financial losses or reduced profits
- A downturn in work
- A decline in product markets or reduction in exports
In order for a genuine redundancy to occur, you must comply with any consultation requirements set out in an award or enterprise agreement.
If you can establish to Fair Work Australia that you terminated an employee for reasons of a genuine redundancy, then any unfair dismissal claim will be dismissed.
In order for you to establish that a termination was a genuine redundancy, you will need independent evidence pointing to the existence of the operational reasons (for example, financial statements, board papers etc). You will also need evidence that redeployment was not possible in the circumstances, because the Fair Work Act requires that you make all reasonable attempts to redeploy the employee within your enterprise (or an entity associated with your enterprise) before terminating them.
For more details on how you can make sure your business is prepared for all the Fair Work Act changes, take a 14 day FREE trial of the Employment Law Practical Handbook. Click here to find out more!
Regards,
Charles Power
Editor-in-Chief
Employment Law Practical Handbook
Tags: employee, employment, enterprise agreement, fair work act, fair work australia, Redundancy, unfair dismissal claim
