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Redundancy | Genuine Redundancy | Employment Lawyers

Written by Michelle Makela

Michelle Makela is one of our Legal Practice Directors and the National Practice Manager. She holds a Bachelor of Laws, a Bachelor of Science (Psychology) and a Master’s in Criminology. Michelle has had a varied career, working in commercial litigation, criminal law, family law and estate planning. Michelle joined Go To Court Lawyers in 2011. She now supervises a team of over 80 solicitors across Australia.

Employees who fall under the national workplace relations system and are dismissed from their employment may be entitled to bring claims under the unfair dismissal laws contained in the Fair Work Act 2009.  Unfair dismissal claims are brought to the Fair Work Commission.  However, if the Fair Work Commission is satisfied that a dismissal was a ‘genuine redundancy’, it will not be classed as an unfair dismissal.

If the Fair Work Commission is satisfied that a dismissal was a “genuine redundancy”, it will not be classed as an unfair dismissal.

Genuine redundancy under the national workplace relations system

The Fair Work Act defines ‘genuine redundancy’.  Firstly, the job that was performed by the employee that has been dismissed must no longer be required by the employer because of a change in the operational requirements of the employer’s business.  This could be the case for a variety of reasons; for example:

  • if there has been a technological development that means a person is no longer required to perform certain tasks
  • if an employer is downsizing and needs less employees than they did before
  • if the employer decides to relocate their business, or
  • if the responsibilities performed by the employee are to be redistributed to other staff members. 

Secondly, the employer must have complied with any requirement under a modern award or enterprise agreement into which they have entered with the employee to consult with them about the redundancy. 

In addition to these two requirements, a redundancy will not be genuine if the employee could reasonably have been redeployed either with the employer or another business which is associated with the employer (for example, two entities will be associated if both entities are owned by the same company, or if the former employer owns the other). 

The redeployment obligation

Employers are required to make active attempts to redeploy an employee who is made genuinely redundant.  There has been some case law since the Fair Work Act commenced in 2009 explaining when a redeployment may be reasonable, and what an employer’s redeployment obligations are. 

It is not enough for an employer to simply help an employee find alternative employment, even if that employment is in the same company.  For example, letting the employee know there are vacancies in the company that they can apply for will not satisfy an employers’ redeployment obligations. 

The employer may also be required to consider redeployment overseas, or whether the redundant employee would be suitable for a new role after a reasonable training period.  It also may not matter whether an alternative role is inferior or involves less remuneration; it generally speaking must still be considered as an option.  It all depends on the individual circumstances.

Genuine redundancy and unfair dismissal

As mentioned above, if the redundancy of an employee is genuine, they will not be able to bring a successful unfair dismissal claim against their former employer.  Even if the dismissal was not a genuine redundancy, it does not necessarily follow that the dismissal was unfair.  The Fair Work Commission must also be satisfied that the dismissal was harsh, unjust or unreasonable. 

Am I entitled to redundancy pay?

If you are made genuinely redundant under the terms of the Fair Work Act 2009, you may be entitled to receive redundancy or severance pay.  Not all employees are entitled to redundancy pay; for example, employees who have been employed for less than 12 months, contract employees and casual employees are not entitled. 

The value of the redundancy pay depends on how long you have been with your employer.  It also depends on the terms of any modern award or enterprise agreement into which you have entered with your employer. If an employer fails to pay redundancy pay, it is a breach of the legislation, which may result in a civil penalty.

What if I am not covered by the national system?

Only certain employees are covered by the Fair Work Act.  For example, public sector employees in NSW, Victoria and WA are covered by State industrial relations legislation.  Whether or not a dismissal really was a case of redundancy is a criteria which the State industrial relations commissions may consider when determining whether a dismissal was fair or not.

Employees covered by the State systems may still be able to bring a claim under anti-discrimination or industrial relations legislation in their State or Territory.  For example, an employer cannot dismiss an employee on the basis of their race in New South Wales under the Anti-Discrimination Act 1977.  Similar rules apply in the other jurisdictions.

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