Redundancy – A Practical Guide for Employers
(This is not advice – seek legal and HR advice)
Redundancy is a complex but sometimes necessary part of business. It’s crucial to handle it correctly to avoid legal issues and minimise the impact on your employees. This guide provides a practical overview for employers.
1. Is it a Genuine Redundancy?
The first and most critical step is to ensure the redundancy is genuine. A genuine redundancy occurs when a job is no longer required due to:
- Business restructuring: This could involve reorganising departments or eliminating roles.
- Closure or relocation: The business might be closing down or moving to a new location.
- Technological changes: New technology might make certain roles obsolete.
- Downturn in business: A decrease in demand or sales can lead to redundancies.
It’s not a genuine redundancy if, for example, you Replace the employee with someone else and the dismissal may be considered unfair dismissal, which can lead to legal claims.
2. Consultation is Key
Australian law mandates that you consult with employees affected by redundancy. This isn’t just a courtesy; it’s a legal obligation. Consultation involves:
- Notification: Informing employees as early as possible about the proposed redundancy and the reasons for it.
- Information: Providing employees with all relevant information about the changes and their potential impact.
- Discussion: Holding meetings to discuss the situation, consider alternatives, and answer questions.
- Feedback: Genuinely considering any feedback or suggestions from employees on how to avoid or minimise the redundancies.
3. Explore Redeployment
Before making a role redundant, you must explore all reasonable redeployment options. This means looking for suitable alternative roles within your business or any associated companies. If a suitable role is available, you should offer it to the employee.
4. Understand Notice and Entitlements
You must provide employees with proper notice of termination. The length of the notice period will depend on their employment agreement, award, or the National Employment Standards (NES).
You’ll also need to pay all outstanding entitlements, including:
- Unpaid wages
- Accrued annual leave
- Long service leave (if applicable)
5. Redundancy Pay
Eligible employees are entitled to redundancy pay. This is in addition to the payments mentioned above.
- Employees are generally entitled to redundancy pay under the NES if they have completed a certain period of continuous service (usually at least one year) and their employer is not a small business (fewer than 15 employees).
- Awards, enterprise agreements, or employment contracts may provide for more generous redundancy pay entitlements.
If you’d like to provide outplacement support for your employee – speak to us
6. Seek HR or Legal Advice
Consult HR professionals or legal experts to review the redundancy process and rationale. This ensures alignment with legal standards and helps identify any oversights, such as misclassifying a performance issue as a redundancy, which can lead to claims.
Speak to our HR lawyer John Dasey
Top 5 HR News Stories in Australia This Week:
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Amanda Rishworth Appointed as New Employment and Workplace Relations Minister
Following a cabinet reshuffle by Prime Minister Anthony Albanese, Amanda Rishworth has been named the new Employment and Workplace Relations Minister. This change signals potential shifts in workplace policy and industrial relations under the Labor government, with implications for HR professionals navigating new regulations or reforms.
HR Impact: HR teams will need to monitor upcoming policy changes, such as updates to workplace laws or employee protections, as Rishworth’s leadership may influence labor market reforms. -
Doctor Burnout Crisis in WA Children’s Hospitals
A report by the Australian Medical Association highlighted that up to 70% of doctors in Western Australia’s children’s hospitals experienced burnout last year, driven by long wait times and intense workloads (biggest improvements in burnout rates were seen at CAHS [Child and Adolescent Health Service] with 62% compared to 80% in 2024). This underscores a critical HR challenge in healthcare, where employee well-being and retention are at risk.
HR Impact: Healthcare HR departments may need to prioritise mental health support, flexible scheduling, and recruitment strategies to address workforce strain and prevent turnover. -
Workplace Safety Concerns Amid Rising Workplace Incidents
Recent news trends suggest an increased focus on workplace safety following incidents reported across industries, such as construction and transport. While specific stories this week are sparse, Safe Work Australia has been emphasizing compliance with updated safety regulations to reduce workplace injuries.
HR Impact: HR professionals are likely reinforcing safety training programs and ensuring compliance with Work Health and Safety (WHS) standards to mitigate risks and protect employees. -
Push for Flexible Work Arrangements Post-Election
After Anthony Albanese’s election victory, discussions around workplace flexibility have gained traction, with the Labor government advocating for policies that support hybrid and remote work. This aligns with employee demands for better work-life balance, a key HR priority.
HR Impact: HR teams are tasked with implementing or refining flexible work policies, addressing employee expectations, and ensuring productivity in hybrid environments. -
Skills Shortages Driving HR Recruitment Strategies
Australia’s ongoing skills shortages, particularly in manufacturing and trades, continue to challenge employers. Reports indicate that businesses are struggling to fill roles, prompting HR departments to adopt innovative recruitment tactics, such as up-skilling programs and international hiring.HR Impact: HR leaders are focusing on talent acquisition strategies, including partnerships with training providers and visa programs, to address labor market gaps.
Unfair Dismissal at Xavier College: HR Takeaways
In Andrew Murphy v Xavier College Limited [2025] FWC 1284, the Fair Work Commission (FWC) awarded Andrew Murphy, a 22-year Latin teacher at Xavier College, Melbourne, $14,000 for unfair dismissal. The case highlights critical HR pitfalls in dismissal processes and the need for procedural rigour.
Murphy was terminated in 2024 for alleged marking irregularities, poor colleague interactions, and maintaining an untidy desk. Specific allegations included inconsistent grading practices and workplace tensions, which Xavier College claimed justified dismissal.
However, the FWC found these grounds lacked substance: the marking issues were not proven to impact educational outcomes, and the untidy desk was deemed trivial without documented performance implications. The Commission criticised the school’s process, noting Murphy received no formal warnings or clear opportunity to address concerns, breaching procedural fairness.
The ruling underscores two key HR lessons. First, dismissals must be supported by robust evidence linking allegations to serious misconduct or performance failures. Second, procedural fairness—through warnings, clear expectations, and remediation opportunities—is non-negotiable. Xavier’s failure to follow these principles led to financial and reputational costs, sparking “uproar” among students and staff.
Actionable HR Recommendations:
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Implement Structured Performance Management: HR should establish clear performance policies, documenting issues like grading inconsistencies with evidence (e.g., student outcomes or peer reviews). Regular performance reviews and formal warnings, as required by the Fair Work Act, ensure employees understand expectations and have time to improve. This mitigates unfair dismissal risks.
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Enhance Procedural Fairness Training: Train managers on FWC-compliant dismissal processes, emphasising documented communication and remediation steps. For example, HR can use templates for performance improvement plans, ensuring allegations are specific and actionable. This fosters transparency and defends against claims of unfairness.
By prioritising evidence-based, fair processes, HR can reduce legal risks and maintain workplace trust.
Sources: Fair Work Commission, Herald Sun
Warren Buffet’s letter on reputation
We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.
-Warren E. Buffett
