Redundancy – Other Considerations & Entitlements

We discuss some of the other considerations and entitlements that your business should take into account when carrying out a restucture or redundancy process in 2021.

Please see below for a full transcript of the video.

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Transcript

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Let’s move on to other considerations and entitlements. So there’s probably four other things you’ve got to think about in a redundancy process. So first of all you need to think about is there a long service leave entitlement? either on a pro rata or ongoing basis. So most states will be 10 years will be the trigger point for long service leave. But many states will require pro rata long service leave in circumstances where a person is made redundant. So in New South Wales, for example, an employee who has five years or more service if they’re being made redundant, that will meet the criteria of termination for any reason other than serious misconduct, and they’ll be entitled to a pro rata long service leave payments.

So that is something to take to be aware of that you might be up for not only redundancy, pay, and notice, but you also might be up for pro rata long service leave a couple of other things I’d like to go into, on this front is around, you know, certainly deed of release. So if we’re offering payments that are higher than what the requirements are under the NES or under the the enterprise agreement, then we could consider entering into what’s called a deed of release. So that’s where we’re saying to an employee, look, we will give you some extra money, because you’ve been with us for a long time where you’ve been a good employee, but it’s going to be subject to you signing this release agreement, which basically releases the employer from any and all future claims in relation to the employment. So that is something that should be considered, we can advise you on how to do that, should you wish to go down that path.

The other thing that you should consider in a redundancy is again, what I said earlier in the presentation is that if you conduct a redundancy, this does not mean if you pay redundancy pay, this does not mean you’re exempt from unfair dismissal. In fact, it’s the opposite. If you don’t follow the requirements of Section 389 in respect to consultation and looking at, you know, possible methods of alternative employment. If they exist, then you could very well have an unfair dismissal where you end up paying redundancy pay notice, leave pro rata long service leave and compensation, you could be looking at compensation under the Fair Work Act, unfair dismissals could cost you 26 weeks. So that’s the reality. That’s the maximum compensation for an unfair dismissal in a redundancy scenario, and you might have a great reason. But if you don’t have consultation, and if you don’t have you haven’t considered alternative employment properly. Or if you’ve stuffed up on selection criteria, or any of the other things we’ve spoken about today, you may have an unfair dismissal. And then the degree of compensation will depend on the circumstances, length of employment, How bad was the dismissal, all those sorts of things.

The other thing that’s important is to be offering a support person in at least one or more of the discussions leading up to the final decision. So definitely in the final meeting, where redundancy is being confirmed, also good idea to offer it in the initial consultation meeting as well. And this is just simply something that deals that’s dealt with in section 387 of the Fair Work Act, which talks about the criteria that the Commission looks at when dealing with harshness. So offering a support person is one of those requirements.

So and I would say to you that look, you know, some, some employers will think, Oh, well, my employees understand that my circumstances are bad. And that, you know, I have to make people redundant, they wouldn’t they wouldn’t take me to the commission for unfair dismissal. I certainly would not be having that logic. Because at the moment, I mean, and certainly at the end of 31st of March, I would imagine there’s going to be a number of redundancies in the economy. And, you know, when people become desperate when they’ve got mortgages to pay, they will look to their previous employers to make claims and they will look to try and seek compensation on these things, particularly if they’re done in a manner which is not robust. So, do not be naive on the types of employment claims that may come.

We have put together this what we call limited time restructure package for anyone is looking at undertaking a restructure. And that is and that would offer the following services as part of the restructure package that we will provide you with the restructuring and redundancy plan. We provide you with advice on the payments and the related obligations. We give you the initial meeting plan the initial consultation letter, we would give you advice about the alternative jobs and selection criteria if it’s applicable, we’d give you advice on the further consultation discussions, the final meeting plan, the final meeting and the discussions and letters around those things. We can organize for you outplacement and EAP. And we can give you a discount for the Fair Work Commission proceedings should you need us to represent you should any matters go before the commission for any for any clients with 1-3 redundancies or one three employees in that restructure costs $1500 plus GST It’s a limited time offer that we’re offering only for the purposes of this because we come to the end of job keeper. We don’t normally offer this as a one off service. We do have it included in all of our support packages for clients which are essential support performance and risk and HR managers for any clients are interested in ongoing support arrangements. They are included at free of charge as part of those support packages. So if anyone’s interested in those things, please get in touch with this at ondemandhrr.com.au and we can talk you through either a limited time restructuring service are or assisting you on an ongoing basis with this being at no extra cost for you as part of a monthly support.