The 2 ‘R’ Words – Redundancy & Redeployment

Understanding redundancy

The first important point is that a person is not made redundant; it’s the position that becomes redundant. This happens when the work assigned to a role is no longer needed—such as when technology replaces certain tasks, or a business review finds that some tasks are unnecessary and can be reassigned.

The initial step for any business considering redundancies is to conduct an operational review, focusing on people, processes, and technology. Ideally, this type of review should be conducted every two years to help the business meet its strategic goals efficiently. However, it can also be prompted by specific situations, such as declining sales or technological advances.

If the review identifies roles that may be eligible for redundancy or redeployment, several essential steps must be followed. Importantly, no final decisions should be made until these steps are completed.

Step 1: Consultation

Once the business review is completed and the affected roles are identified, the employees in those roles must be consulted with. This is because there is an obligation to consult with employees regarding major workplace changes that are likely to have a significant impact on them as soon as reasonably practicable after the outcome of the business review is known.

There is a very high risk of the redundancy not being considered genuine where the employer fails to comply with the consultation requirements. In this circumstance, it is likely the failure to consult could lead to an unfair dismissal claim (which would very likely succeed).

So, what does a consultation process look like?

• Notify the relevant employees of the change and disclose all relevant information regarding the nature of the proposed changes including:
• the anticipated impact of the changes on employees,
• any measures to avoid or reduce the adverse implications of the change, and
• any further matters likely to affect employees.
• Consultation must occur once the decision to take an action by the employer has been made: not in the last step prior to the implementation of the change.
• During consultation, an employer must explain the circumstances necessitating the change and whether all practicable alternatives to the proposed change have been considered (including redeployment).
• The employer must then seek input from the employee and consider the employee’s response.
• Once the employee responses have been considered, then the employer can make the decision about redundancy and/or redeployment and advise the employees accordingly.

Whilst the decision is ultimately the employer’s, the objective of the consultation process is in part to allow employees the opportunity to propose measures to mitigate any negative effects of the change.

Redundancy & support person

With AHRI’s latest Australian Quarterly Work Outlook report showing redundancy intentions are on the rise for the September 2024 quarter, difficult conversations regarding redundancies are likely happening in many workplaces across Australia.

While it is not an automatic ‘right’ for a support person to be present when discussing redundancy and/or redeployment options, it is best practice for an employer to make the employee aware they can have a support person present if they want to.

At the same time, whoever the support person is needs to understand their role when attending the meeting and the employer needs to understand there are limited options to reject the employee’s choice of a support person.

The support person can be anyone the employee would like; the employer’s policy may also say it is preferred if the support person is not a co-worker. However, there would still need to be a very good reason to reject the employee’s preferred support person unless there is a conflict of interest or where the disclosure of information in the meeting may create a conflict of interest for that support person.

A support person is not an advocate for the employee; the role is to support the employee and generally not speak on behalf of the employee. The support person might offer emotional support if an employee becomes upset or hand a note to the employee during the meeting suggesting something the employee might like to say or perhaps takes notes of the meeting (taking into account compliance with confidentiality obligations).

It is good practice for the employer to ensure the support person understands their role and confirms their commitment to comply with the parameters of their role. Where a support person becomes disruptive or tries to be an advocate, the employer is within their rights to ask the support person to refrain from whatever their actions are and, where appropriate, either ask the support person to leave the meeting or suspend the meeting.

Where the meeting is suspended, the employer would advise the employee they have a day or so to find another support person and reschedule the meeting.

The only caveat to the support person role is where there is a union representative or workplace delegate is present in a workplace matter in their official capacity, they can advocate on behalf of the employee, unlike a general support person who is there only for emotional and practical support.

What is a reasonable redeployment?

According to the Fair Work Act, a person’s dismissal is a case of genuine redundancy if:

• the employer does not require the job to be performed by anyone due to changes in operational requirements;
• the employer has complied with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy; and
• it would not have been reasonable for the employee to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

To be clear, if an employee proves there was an alternative role available which was not offered to them or that a redeployment offer was not reasonable or fair, there is a risk of an unfair dismissal claim.

Whether redeployment is reasonable is based on the circumstances at the time of the dismissal – e.g. whether there is another role available, the employee’s skills, experience and/or qualifications and whether they are a fit for the potential redeployment, the location and wage/salary.

Characteristics of a redeployment offer are that there must be consultation, it must be fair and objective and also takes into consideration the impact on the employee’s personal and professional circumstances.

The employer should not assume an employee would not consider a redeployment opportunity with different terms and conditions of employment… it is the employee’s choice as to whether they would consider a redeployment opportunity.

Where an employee does not accept a redeployment opportunity that is a similar role with similar terms and conditions of employment, it is likely that the employment relationship will be considered terminated at the employee’s behest.

Key takeaways