Home - Can you retrench a worker while they’re on annual leave?

UpdatesOct 24, 2016

Can you retrench a worker while they’re on annual leave?

Business-owners are often called on to make tough decisions. One of the toughest can be informing workers that their position has been selected for redundancy and their services are no longer required. This can be even more difficult in small companies where relationships between owners and workers can be more personal than in larger companies.

Getting the redundancy process right is critical because often you are dealing with people’s emotions, too.

By Jeff Salton

Business-owners are often called on to make tough decisions. One of the toughest can be informing workers that their position has been selected for redundancy and their services are no longer required. This can be even more difficult in small companies where relationships between owners and workers can be more personal than in larger companies.

Getting the redundancy process right is critical because often you are dealing with people’s emotions, too.

So, what happens when one of your employees is overseas on annual leave but their role becomes redundant … and they’re not due back in the country for another four weeks?

But they’re on holidays …

Can you legally make the worker’s position redundant while they are on holidays, and if so, how can you let them know? What is the best way to inform the worker of the redundancy, assuming that you don’t wish to wait another month for the worker to return? When do you calculate their entitlements? At the end of their annual leave period or sooner? So many questions …

Employment law expert Charles Power says an employee’s position can be selected for redundancy when they are on annual leave, provided that the fact that they took annual leave wasn’t a factor in determining their role to be redundant.

“The date you give notice and intend for termination to take effect will determine when you calculate entitlements from,” he says. “You may wish to consider whether the employee has the benefit of any consultation obligations under an award or enterprise agreement as this may affect when you give notice of redundancy, and how this notice is given,” Charles warns.

He suggests that a notice of termination is generally required to be given to the worker in writing, and recommends presenting workers with a termination letter. But if the employee is away and will not immediately receive notice, it can be sent via an email.

“But make sure you ask the worker to confirm in writing that they have received the email,” Charles says.

Be prepared

Redundancy can be a tricky area for a number of reasons and it’s important to be aware of your employee’s entitlements and the legal risks involved.

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