The Redundancy Selection Process

At our recent seminar series on how to effectively manage the seperation process, many of our clients expressed an interest in learning more about the process of redundancy in light of the new IR laws passed in Federal Parliment and due to come in to effect on 1 July 2009. We thought the following steps may give you some initial guidance. In addition we are currently working with our partners in the legal fraternity to develop an integrated service that will help our clients to ensure their processes are aligned with the new laws. We have also created a supporting checklist. For a copy please email our Business Development Manager, Stacey Blanch at stacey.blanch@donington.com.au

Redundancy Steps
The following information below depicts the basic key elements under each redundancy step that should be addressed.

1 Ensure that the role is genuinely being made redundant.
Make sure that the role is not going to be replaced, and that the redundancy is not a result of the employee/s behaviour or performance. It is important to make sure that the job is justifiably regarded as being excess to operational requirements. All other alternatives to the redundancy must be examined such as reduction in overtime and redeployment of the employee/s.

2 The next step is to appropriately select and consult with the employee who’s role is being
considered for termination.
If an employer has a choice in which employee/s will need to be terminated then a fair and equitable selection must be utilised. For example, an objective test on the basis of each individuals performance. It is important to remember that the employee has the right to respond to that selection criteria.

3 The process of consultation then commences.
At this stage the employer has a private and confidential discussion with the employee to inform them of the pending redundancy. This consultation process should take the form of a meeting or meetings whereby the employee has the opportunity to discuss and query options with the right to reply to any of the criteria used for question.

4 A notice of termination to the employee is required.
The appropriate notice period will depend on the content within their contract, any notice period required by an applicable employment contract award, enterprise agreement, workplace agreement, National Agreement Preserving a State Agreement (NAPSA) or PSA and any minimal requirements set out in the federal legislation.

5 Redundancy Payments
Upon the finalisation of employment the redundancy payments will integrate amounts for accrued and untaken annual leave, pro rata long service leave, accrued but unpaid wages including overtime, accrued and unpaid bonuses or commissions, reimbursement of approved expenses and superannuation contributions (paid direct to the superannuation fund) calculated to the end of the notice period.

Note: The Fair Work Bill 2009 is anticipated to commence 1 July 2009. It is important to remember that the provisions relating to National Employment Standards (NES) and modern awards are anticipated to commence on 1 January 2010. To view the transitional provisions and consequential amendments bill please visit the Australian Government Website for more information.