Implementing significant workplace change and redundancies can be highly stressful for employers. In part, this can be due to the emotional aspect, but also the prospect of incurring personal fines through litigation for unfair dismissal, adverse action or discrimination.
Employers expose themselves to multiple claims at every point throughout such processes. However, there are five critical steps that employers can follow that can remove some of the risk from the equation.
Make sure you can clearly demonstrate:
- an economic, structural or technological change affecting your business that necessitates restructure and/or redundancies.
- a clear connection between that change and the positions that will be affected.
- Use objective criteria when selecting individuals for redundancy such as skills, experience, qualifications and prior work performance rather than subjective grounds that could be deemed discriminatory.
- Consult affected employees in accordance with the relevant industrial instrument (i.e. award or agreement).
- If more than 15 employees are being selected for redundancy, notify Centrelink and any relevant union, if at all, in accordance with the provisions contained in the Fair Work Act 2009 (Cth.)
- Understand what termination payments need to be provided to employees whose positions have been made redundant.
Failure to consult in accordance with the binding award or agreement, or failure to select individuals for redundancy based on objective criteria could place an organisation at serious risk of multiple claims, each of which can carry significant fines and penalties.