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UpdatesSep 24, 2014

How to make sure a redundancy is ‘genuine’

Retrenchment occurs when an employee’s employment is terminated because their job has become redundant.

5 mins read

[Ed Note: Retrenchment occurs when an employee’s employment is terminated because their job has become redundant.

If you need to make an employee’s job redundant, it’s important to ensure that the redundancy is genuine – otherwise, the dismissal will not be exempt from unfair dismissal laws.

Under the Fair Work Act 2009 (Cth) (FW Act), a redundancy is genuine when:

Today, Charles Power will look at these requirements in more detail.

But first…

Before you decide to dismiss an underperforming employee, you need to consider the legal risks involved.

If you don’t take reasonable steps to help improve your employee’s performance, you may leave yourself vulnerable to an unfair dismissal claim.

Until next time…]

3 questions to ask to determine whether a redundancy is genuine

To meet the requirements of a ‘genuine redundancy’ as defined in the FW Act, make sure you can answer ‘yes’ to the following three questions:

1. Does your business no longer require anyone to perform the role due to operational changes?

Operational changes can occur due to:

2. Have you complied with your consultation obligations?

You must comply with any consultation provisions set out in an applicable enterprise agreement or modern award.

If you are covered by an enterprise agreement, you are required to consult with employees about any major workplace changes that are likely to significantly affect them.

Generally, modern award consultation provisions will require you to meet with affected employees to:

3. Is it unreasonable in the circumstances for you to redeploy the employee?

If it is reasonable, you are required to offer a redundant employee continued employment in another role as an alternative to retrenchment.

This requires:

Redeployment will be reasonable if:

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