Redundancy: Understanding Your Rights

It is important that both employers and employees understand their legal rights and obligations with regard to redundancy, particularly as the current economic environment means that the number of redundancies is on the rise.

It is the employer's prerogative to abolish an employee's position altogether, or redistribute their tasks to other employees. The decision must be made for genuine operational reasons, and must not disguise an ulterior motive.

Businesses with over 100 employees will need to be able to demonstrate that a fair process has been followed in order to guard against unfair dismissal claims (note that as of July 2009 the Fair Work Bill 2008 will apply this standard to all employers). All employees are protected by unlawful termination provisions in the event that discrimination is involved in the decision making process.

Employers should ensure that they give the applicable termination notice, or payment in lieu thereof. In many cases the proper period will be specified in an award or workplace agreement. The Workplace Relations Act 1996 provides a minimum period in the absence of such an instrument, which varies according to length of service. The instrument governing the employment relationship will often provide for severance pay, in addition to payment for the notice period.

In order to safeguard your business, the decision to make positions redundant should be taken with the utmost care, and only after all other options have been explored.