One of the repercussions we are seeing this week, caused by the havoc of COVID-19, is the huge numbers of employees being made redundant. While the Australia Government is doing everything it can to assist businesses, so as to avoid mass job losses, it is an unfortunate consequence that many people will have their positions made redundant. Despite the ever-growing fund of government assistance to help businesses pay their employees, the sad reality is it will not be possible for all businesses to keep their doors open.
At the moment, we are unable to predict how long the pandemic of COVID-19 will continue for, and how long Australia’s social and economic conditions will suffer. Many are predicting that these restrictions on business activity and social movement may continue for up to six-months. For many businesses, that is a frightening concept. They face closing doors for the six-month period, and there is no guarantee that their doors will open again.
For employees, this means a redundancy may either have occurred, or be on the way. The concept of redundancy is scary, and it is a reality in these times. However, this does not mean to say that a redundancy can be made swiftly by an employer, and made without meeting the legislative requirements of the Fair Work Act 2009 (Cth) or any relevant state legislation or industrial instrument.
“What is a genuine redundancy?”
A “genuine” redundancy occurs where the employee’s job is no longer required at the business (and is not able to be performed by anyone else within the business).
In order for it to be a genuine redundancy, the employer also must follow any consultation requirements in any relevant award, enterprise agreement or other registered agreement.
When an employee’s dismissal is a genuine redundancy the employee isn’t able to make an unfair dismissal claim. A dismissal is not a genuine redundancy if the employer:
- still needs the employee’s job to be done by someone (eg. hires someone else to do the job)
- has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or
- could have reasonably, in the circumstances, given the employee another job within the employer’s business or an associated entity.
In many cases, it may be due to changes in how the business operates or whether the business will even continue to operate. Some examples of large scale redundancies in the past have been redundancy were when the General Motors Holden Factory closed in Elizabeth in late 2017, or when Ansett Australia was unable to continue flying and placed into administration in 2001.
“What am I entitled to if I am made redundant?”
This will all depend on the way in which you have been engaged, the wording of any relevant contract of employment (or industrial instrument) and your length of service. This can all be assessed by an employment lawyer, or by consulting with Fair Work.
We can say however that redundancy entitles you to be paid any outstanding wages, and depending on the length of service, a payment in lieu of notice and a severance payment. An employee is also entitled to be paid all accrued but untaken annual leave and long service leave.
“What must my employer do before making me redundant?”
If you have been made redundant, your employer is required to inform you of the decision, the reasons behind the decision and how it will affect you. When you are informed of that decision, it is important to raise any concerns you may have regarding the decision and express your willingness to be redeployed, should you be aware of a position available. The employer is obligated to look for acceptable positions within the organisation, but that position needs to be acceptable, and be one at a similar level of pay and responsibility. You may risk a payment of redundancy if they offer you a role of this kind, and you refuse to accept it.
COVID-19 has had such a dramatic effect on the economy, and so it may actually be a legitimate reason for redundancy. However, this does not mean to say that the employer can simply make an employee redundant without proper consultation (unless an employee has been employed for less than 12 months). If you have been made redundant, we strongly recommend that you seeking legal advice as to whether such a redundancy has been done on a “genuine basis” and whether the proper procedure has been followed. Some questions you may wish to ask include;
- What has led to this decision?
- What other vacant positions are available for me to be redeployed too?
- Will I receive a Certificate of Service or a Written Recommendation?
- When will I be paid my outstanding entitlements?
- Will my post-employment restraints still be enforced?
It is important to note that upon being informed that your position is being made redundant, you may be required to work all, or a portion, of your notice period. This will all depend on the circumstances.
If you are at all concerned that your redundancy has not been a genuine one, please contact us immediately. There are time-limits in terms of filing in the Fair Work Commission for terminations that are unfair, or adverse action taken in breach of general protections.
COVID-19 has been a situation that was entirely unpredicted. For this reason, it can be difficult for redundant employees to gain further employment. Government assistance, as mentioned above, is coming in fast to help those in this position. It may also be beneficial to seek advice from a financial advisor or an accountant as to whether you are entitled to access your superannuation and whether it is a viable option for you.
For further information about the steps both the Federal and State Governments are taking with respect to unemployment, we refer you to the following:
Australian Taxation Office:
Money Smart Australia:
If you have any questions in relation to your specific circumstances, please contact Kathryn Adams in 0452 614 454 or firstname.lastname@example.org
Prepared by Biana Muller and Kathryn Adams, Hallett Law, Barossa.