Often unpleasant, having to make a redundancy call can be an unfortunate reality in running a business. Yet very few business leaders know how to approach this delicate task.
Redundancy becomes necessary when your company doesn’t need an employee’s services and/or if it is facing imminent insolvency or bankruptcy.
Here’s a list of things to help you ease the redundancy process:
- Confirm the redundancy is genuine - be sure you don’t need the role and it’s not a simple way to get rid of someone.
- Follow redundancy procedures
- Work out your pools for selection
- Determine criteria for redundancy
- Consult sufficiently and properly
- Calculate redundancy payments correctly
- Observe timing
Confirm the redundancy is genuine
If there is a need to retrench an employee(s), make sure to exhaust all other possible alternatives. Make sure that it is a necessary, pragmatic decision by confirming if it is a genuine redundancy.
A redundancy is genuine when it is fair and legal and when your employee(s) cannot challenge whether or not you have acted reasonably in making the redundancy An employment tribunal can conduct an investigation on any dismissal.
As an employer, misrepresenting information, such as a claiming performance or capability dismissal as a reason for redundancy, might establish a case for an unfair dismissal claim. To avoid legal repercussions, observe propriety, stick to valid and verified information, and proceed with the redundancy as respectfully as possible.
Read more on how to make an employee redundant.
Follow redundancy procedures
Every company has specific company procedures for dismissals involving redundancies. If you need more guidance and assistance, visit the Department of Human Services redundancy information guide for employers.
Work out your pools for selection
Make sure to discuss clearly with employees the proposed restructuring plans, including the reasons why it is valid and necessary. Be specific. Listen to what employees have to say and answer questions as truthfully as possible.
Let them understand which jobs are at risk and identify the employee(s) who will possibly face redundancy. Maintain an open line of communication during the entire process.
Determine criteria for redundancy
The general criteria should always include fairness and objectivity. The criteria should a ensure measurement and proof of non-discrimination are possible.
Consult sufficiently and properly
Inform employees that are facing redundancy of the reasons why. Advise them of the consultation period and ensuring face-to-face meetings would take place.
Include employees on long-term illness leave or maternity leave in all consultation discussions and meetings.
Calculate redundancy payments correctly
Follow appropriate legislation in calculating redundancy payments and account for all other entitlements that may apply, such as superannuation and sick pay.
Read more about how much to pay employees being made redundant.
Observe proper timing of when to break the news of a redundiation. If employees are away or on leave, wait for them to return.
Observe professionalism and respect at all times.