Blog

Workplace Change - When is a Redundancy Genuine

Paulette McCormack

Fresh HR Insights

If you can prove that a redundancy is genuine, you will have access to the genuine redundancy exemption.


Definition: Genuine Redundancy Exemption
The genuine redundancy exemption is when employers are exempt from unfair dismissal laws because the dismissal was a genuine redundancy.

Under the FW Act, a genuine redundancy will meet the following requirements;

  • You terminated the employee because you no longer required anyone to do the job due to changed operational requirements
  • it was not reasonable for you to redeploy the employee within your own enterprise or that of an associated entity
  • you have complied with any consultations requirements outlined in an applicable modern award or enterprise agreement.

 

Role is No Longer Required
You must prove that there were logical and rational operational reasons for any workplace change theta results in redundancy.

The FWC may require you to produce;

  • Financial records proving that there were genuine financial reasons for the workplace change; and
  • Minutes of the management or board meeting where the decision was made

Caution: A genuine redundancy will not arise if the sole reason for the dismissal related to the employees personal attributes

Offering Redeployment

Definition: Redeployment
Redeployment means offering a redundant employee continued employment in another role as an alternative to retrenchment. 

A redundancy will not be genuine, and will expose you to an unfair dismissal claim, if;

  • you decline to offer any newly created or otherwise vacant jobs to the displace employee; and
  • offering these jobs to the employee would have been reasonable, taking into account;
    • o the employees skills and competence
    • o the remuneration of the role; and
    • o the location of the role

If an employee agrees to redeployment to another role in your business, you will not be obligated to pay any redundancy pay under the FW Act, because you did not terminate the employment.

The FWC will determine alternative employment to be acceptable even if the employee does not like the alternative job.

Hopefully you found this blog article useful. Get all our FREE tax accounting and advisory news,
tips and information by subscribing to our monthly newsletter.

Feel free to contact us for a complimentary consultation. Let us get you on TRAK to success