Key Considerations for Managing Workplace Redundancy

1. Key Considerations for Managing Workplace Redundancy

2. The realities of running any business or work team is, more likely than not, as service delivery systems and client needs change, there will be a need to create new roles and make others redundant. These structural changes impact not just the person whose role is changing or being abolished but also their colleagues, managers and other employees within the organisation. Therefore, it’s vital that managers are properly supported by experienced HR advice and assistance as they plan and implement a workplace redundancy program – whether they are a large metropolitan company or organisation in a location like Sydney, Melbourne or Brisbane, or a small regional business in a regional location like Albury, Wagga or Bendigo.

3. Check to ensure that you know what ‘redundancy’ actually means • The Fair Work Act provides that a person’s dismissal will be considered to be a ‘genuine’ redundancy if the employer has made a decision that it no longer requires the person’s job to be performed by anyone, due to changes in the operational requirements of the employer’s business. • Therefore, it is the role that is redundant. So, an important starting point is understanding clearly that the decision to make a role redundant is based on business need, not individual performance or personal likes and dislikes of different employees.

4. It is when this fundamental understanding is not clear and understood, that employers often run into difficulties such as decisions to make a person ‘redundant’, when the real reason for the termination is poor performance or misconduct. Whilst performance and employee behaviours may be considered in the selection of staff who will be terminated due to redundancy, it should never be the reason for a role to be abolished. • The Fair Work Commission can allow an employee to make an unfair dismissal application if there is doubt about whether the redundancy was genuine or not. This is particularly relevant where the skills of the employee could have been readily redeployed within the organisation or where the role continues to exist in one way or another after the employee’s termination.

5. For the termination of an employee to meet the ‘genuine redundancy’ criteria, there are obligations on the employer to consider and identify potential redeployment options within the organisation for employees whose role is redundant. This redeployment obligation can become problematic when the employer hasn’t considered a redundancy program holistically, and options for redeployment that might be viable for a range of employees are not managed collectively wherever possible. Redeployment options include any role the employee could perform or could perform after a reasonable period of retraining. Employers often confuse this process with a normal recruitment process where they are seeking the best person for the job. Redeployment considerations are limited to whether the affected employee could perform the job, they do not include whether there may be someone better to perform the job.

6. In addition to these considerations, the employer must comply with any applicable consultation obligations in a modern award or enterprise agreement and any contractual requirements contained in the employment contract. • In our experience, this consultative obligation is also not well understood or executed during redundancy processes and has the potential to create a protracted and costly change process. Not to mention the impact this has on staff moral and trust.

7. Prior to commencing any business change process where redundancies might be involved, it’s very important that the employer understands all of their obligations and assess the risks. Beginning with a clear picture of the employment terms and conditions (e.g. the relevant employment contract, Enterprise Agreement or Award and the National Employment Standards), clarify what is required to meet your obligations before beginning to implement any workplace change process. Often, issues arise, and disputes eventuate when the employer doesn’t follow the requirements set out in their own employment framework. Be clear on what your obligations are

8. Critical Success Factors The following are the key components that need to be planned for and managed efficiently and effectively to maximise the success of any redundancy process no matter how big or small:

9. Take the time to build a change plan that considers what the changes are, where they will impact, why, when and specifically which employees will be directly affected. Think about timing of the announcement and who will make it. Build a related project plan to help map out each action over time, including key communication points etc. • Build a solid plan

10. Communication Clear, complete and well thought through communication is key. Build a communication plan prior to commencing – considering key stakeholders and the messages and timeframes that you need to convey to them. This should be linked into the overall change plan mentioned above.

11. Consultation Understand your consultative obligations and engage with them. Of course, it is likely that some discussions will be difficult, but avoiding this obligation or not genuinely engaging in it is likely to create additional issues that will demand attention and resourcing in order to achieve the outcome being sought. Consultation requirements in modern awards, for example, require the employer to notify affected employees when a decision has been made and to provide those employees with information about the changes, the expected impact, and discuss steps to avoid and minimise negative effects on the employee, including genuinely considering any response the employee may have to the information provided.

12. Training for Line Managers If line managers are leading the ‘on the ground’ change processes, make sure that they have been provided with tailored training to enable them to confidently and consistently manage the interactions with their work teams as the process progresses. Clear, consistent and confident messaging is critical.

13. Support for employees declared redundant Make sure that employees know where they can seek support from. Some employers engage with an Employee Assistance Program which provides counselling to employees at the employers cost. Other employers engage other professional counselling services or offer to fund a service selected by the employee. Where an employer engaged service is utilised, make sure they are briefed before commencing the change process and ensure that managers and employees (both those directly affected and those working with them) are reminded of how to access these services. It is important for the wellbeing of all staff that the exiting of employees from the workplace due to redundancy is facilitated respectfully and even though their services are no longer required, the employees valued contribution is recognised and appreciated.

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