Fair Work Act - Redundancy

From 1 July 2009 the Fair Work Act Employers must prove they have proactively pursued all redeployment alternatives in order to avoid adverse litigation and compensation claims.

Under the new Fair Work Act, the 'genuine operational reasons' exclusion has been ommitted and this significantly increases an employers obligation to satisfy a tribunal that a redundancy is fair.

For example a ‘genuine redundancy’ will not stand up if it would have been reasonable for the employer to redeploy the redundant employee in another part of the employer's operations, or that of an associated entity. The obligation is on an employer to prove that it proactively pursued all alternative options first, including the redeployment of workers into different roles or related companies.

An employer is also legally obligated to contact Centrelink if it plans to make 15 or more employees redundant. Under the new legislation the maximum penalty is now$3,300.

Employers should also be aware of their NEW obligation to properly consult with and divulge information to trade unions when planning to let 15 or more workers go (providing at least one of the workers is a union member).

When forced to make redundancy decisions we recommended that you keep thorough records of all conversations, dates, meetings and and other correspondence that helps to show that you explored all avenues to retain staff and have followed all your consultation obligations will help to minimise and defend any subsequent litigation.

What you need to do:

Employers need to ensure they have identify all relevant stakeholders and have a well documented step-by-step redundancy process. We strongly recommend that all employers seek the guidance of a HR professional to ensure you meet all your obligations under law and to mitigate the particular risks associated with your business.

My Performance Coach will help you to ensure that you have everything you need in place to be able to operate your business effectively.