As a business owner, you may need to restructure your business, especially if you are experiencing tough times. This can involve making employees redundant.
However, you need to make sure that you are complying with your legal obligations. Otherwise, it may seem as if your restructure is just a cover-up for illegally terminating an employee.
Under the Fair Work Act, someone can be dismissed for genuine redundancy if their job is no longer needed to be done by anyone, and you have consulted them (if required).
However, it won’t be a case of genuine redundancy if you could have placed the employee somewhere else within your business or an associated business. If this is the case, you can be found guilty of unfair dismissal.
In a 2016 case, an employee on maternity leave asked her employer for a flexible working arrangement. Right as she was due to come back, she was told that she was being made redundant as the business was being restructured. The Fair Work Commission decided that the employer had taken adverse action against her, and they were ordered to pay her $52,000 in compensation.
Therefore, if you are an employer, you must stay on top of your obligations if you are making someone redundant. This includes advising them that you are considering the redundancy, consulting with employees covered under an award or agreement to see if there are any other roles you can offer them, and knowing any entitlements you have to pay out (on top of redundancy pay).
It is also a good idea to seek expert legal advice.