The Australian Bureau of Statistics observed a 12 per cent exit rate in 2021. This means that about 277,674 businesses have either closed their doors or sold off their businesses.
Employee retention is possible for companies that change ownership. But if the new owner has a team of their own, they may declare some positions redundant.
What are employment redundancies, and what alternative employment options should employers offer? This article will try to answer these questions.
Termination vs. Retrenchment vs. Redundancy
Employee termination, retrenchment, and redundancy are all forms of employee dismissals. The difference among the three is the reason for dismissal.
Terminations are voluntary or involuntary dismissals in accord with an employee’s contract. They are voluntary when an employee’s contract expires, or they resign from their post.
Terminations become involuntary when an employee is dismissed for non-compliance to company rules, breach of contract, and so on. But if an involuntary termination is unfairly made, employees can hire an employment lawyer and explore their legal options.
Retrenchment is a dismissal that aims to lighten a company’s financial burden. If a business is struggling, it may choose to reduce its human resources to keep afloat. When done right, retrenchments can have a positive impact on retained and retrenched workers.
Redundancy is a dismissal of employees because of the position they hold. A common reason for redundancies is having too many people maintaining the post. Employees who have jobs that the company no longer needs are often subjected to redundancies.
Defining Genuine Redundancies
Employment redundancies, retrenchments, and terminations fall under the jurisdiction of the Fair Work Act of 2009 (FW Act). This law defines what constitutes genuine redundancy and unlawful dismissals. If employers fail to meet the provisions under the FW Act, employees can hire employment lawyers and pursue legal action.
According to the FW Act, employers need to clearly establish grounds for dismissal. If an affected employee is not given a vacant post that they can handle, it is an unlawful dismissal.
Additionally, reducing redundancy pays can put employers in proverbial legal hot water. The only way they can reduce the pay is to apply to the Fair Work Commission. However, employers must acquire job offers for the affected employees in exchange.
Post-Redundancy Alternative Employment Offers
Most of the time, employers are obligated to consult with employees about job redundancy. During this time, employers and affected employees consider ways to mitigate the redundancy’s impact.
Under the Fair Work Act of 2009, employers need to ensure they can no longer accommodate the employee before dismissing them. Employers can offer alternative employment offers to reduce the risk of a legal backlash.
Redeployment is changing a person’s role in the company. Instead of dismissing workers, employers can transfer them to another team or department. However, the employer must ensure the new position is suitable for the redeployed worker. There is also the possibility of retraining tenured employees to occupy newly created roles.
Acquiring Other Acceptable Jobs
Helping affected employees to find new work is a way to minimise the blow of employment redundancies. These jobs may be within the employer’s group of companies or with another employer. Pointing employees to a vacancy is not enough. Employers need to secure a job offer employees can readily reject or accept.
Employment redundancies affect your employees and the people who are dependent on them. However, there are instances where redundancy is inevitable.
Still, it does not mean employers can dismiss workers without a second thought. The Fair Worker Act of 2009 protects employee interest. Workers are free to seek help from experienced employment lawyers if they feel unfairly treated and wrongfully dismissed.
If you are looking for experienced and reliable employment lawyers in Brisbane, QLD, turn to Saines Legal. We are a full-service employment law firm with lawyers who can protect and assert your rights. Contact us for a consultation today!