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Redundancies should never be taken lightly

During the incredible growth decades that immediately followed the Second World War, redundancy was unheard of. However, advancing technology over the last 35-years has changed all that. Redundancy is now commonplace and it occurs when the work performed by an employee is no longer necessary because his or her job is replaced by technology or the work is restructured making the employee redundant.

There is a minimum scale of severance payments in most awards and where awards do not apply, most employers have a voluntary scheme whereby they pay workers a certain amount as a lump sum when they are made redundant.

 Redundancies should never be taken lightly
This decision to make a worker redundant, is normally based on circumstances other than the ordinary and customary turnover of labour.

Typical reasons for a position to be made redundant include:

  • Technological changes;
  • Restructuring of the workplace;
  • An employer's inability to pay employees; and
  • The sale of a business, i.e. employees are not kept on by the new owners.

One of the fundamentals regarding redundancy, is that it must be genuine. Since redundancies arise due to the "operational requirements" of the business rather than poor performance, redundant employees will generally not be replaced. Where an employer is considering redundancy, there is no substitute for taking time out for getting excellent and informed advice.

At the very least, an employer considering a redundancy should consider the provisions of any award or enterprise agreement concerning redundancy which may apply to employees.

Of course, there are instances where employees may wish to dispute redundancy. In such cases, employees might believe their dismissal was unnecessary, harsh, unjust or unreasonable. They can then apply for some sort of hearing where an independent arbitrator will make a ruling.

In redundancy disputes, the deciding authority will typically look at issues such as:

  • The case's merit (the dismissal must be based on the operational requirements of the business i.e. has the position been made redundant); and
  • The process involved in the dismissal (whether a fair process was followed).

In situations where a job disappears, or is moved, causing a redundancy, the employer must follow a recognised procedure when selecting who is to be made redundant. In fact, the whole question of WHO should be made redundant is very often the most vexing of all.

Employers are obliged to follow a set dismissal procedure before dismissing any worker, and this includes redundancies. In normal circumstances, before making a worker redundant, employers must:

  • Send the employee a written statement, stating why the individual is being made redundant;
  • Hold a personal meeting with the employee to discuss the matter; and
  • Hold an appeal meeting with the employee in cases where the employee wants to appeal against the decision.

For workers, and sometimes for employers also, redundancy can be very emotional. It should only be initiated after careful consideration of all the options.  In small communities especially, making workers redundant can have a profound impact that spreads well beyond the individual workers and the workplace. In some cases, when carried out on a large scale, redundancies have been known to cripple communities and have long-term negative effects on whole communities.

 

Terminations