Your business is going through a restructure. You have made a firm decision to proceed, you have identified a role, and you have a justifiable business reason for carrying it out. Everything looks like a go. There is one thing that most employers forget and skip, and it can lead to an unfair dismissal claim, regardless of how justifiable the business reason is and how good your consultation process is.

What makes a redundancy genuine

A genuine redundancy can only occur if you no longer need the job done by anyone because of a change in the business, and you have met any consultation requirements in the relevant modern award or agreement.

Even if you have ticked those boxes, it is not a genuine redundancy if it would have been reasonable to move the person into other work in your business or in a related company or entity. If this is ever challenged, the Fair Work Commission may decide it would have been reasonable to move the person into other work, and the whole process may then be considered an unfair dismissal.

It does not matter what your reason is, how genuine it is, or how much you consulted. If there were other reasonable options where the employee may have been able to be redeployed, and they were not considered before you made your decision, the decision itself may still be considered an unfair dismissal.

What “other work” means

Other work means the whole of your business, so all different locations and sites, or wherever your business operates. It also goes across to any related entity, not just the business itself.

How we advise clients to manage this

We suggest you put every vacancy in front of the employee, specifically anything in the same or a similar department, or directly transferable. Name those vacancies directly to the employee as part of your redundancy and restructure process.

For roles that are unlikely to suit but are genuinely vacant across your business or related entities, share a general reference, such as your company’s SEEK page or other sources, where the employee can look through the roles and apply for them if they wish.

There is no need, for example, to specifically tell a chief executive who is being made redundant that there is a position sweeping floors in a factory on the other side of the country. It is an extreme example, but technically it is still a vacant role, and the general reference covers it. This matters most in larger businesses with many vacancies.

When an employee applies for a role

Even if an employee applies for a particular role, or says they are interested in it, there does need to be a genuine evaluation process. Being an incumbent employee does not necessarily mean you have to accept them into that role.

Why this puts you in a stronger position

If you have genuinely shared any available vacancy and the employee decides they are not suitable, you are in a much better position to defend the validity of the restructure process if it is ever challenged in front of a tribunal.

Skills and training

Compare the employee’s skills with each role, and ask whether there is any reasonable training you could provide to close the gap. A role that needs a little training is not ruled out automatically because the employee does not meet the requirements today.

Keep a written record

List the roles you considered, why each one did not work, and any offers or discussions you had with the employee. These can be referred to if there are any future proceedings.

Need a hand?

If your business is planning a restructure and you are not sure you have covered this, reach out for a no-obligation chat before you carry it out. Email advice@ondemandhr.com.au or visit ondemandhr.com.au.