Redundancy Laws What Do They Mean?
Fair Work Act 2009 s.389. States An unfair dismissal application cannot be made if the dismissal was a case of genuine redundancy. Australian Redundancy Laws, what does that mean to employees out there facing the loss of their job? There are two types of redundancy, genuine and non genuine.
A genuine redundancy is when:
1) Changes in the operations of the employees place of work can result in the employer no longer needing an employees job role to be carrying out.
2) All consultation obligations imposed by an applicable modern award or enterprise agreement has been complied with by the employer.
3) Attempts are made to see if you can be relocated within the company or an associated entity
What is not a case of genuine redundancy?
- Your job is still there
- They did not consult with you in a meaningful way
and
A dismissal is NOT a case of genuine redundancy if it would have been reasonable in all of the circumstances to redeploy the person within:
the employer’s enterprise, or
the enterprise of an associated entity of the employer.
IF the employer has not complied with the “three arms” to S389. Then it is not a genuine redundancy and a unfair dismissals or general protections application can be lodged, be aware of the very strict 21 days from your termination to do so.
What is a genuine consultation?
Consultations must be genuine and not perfunctory. Not being called in and just told, or the employer puts the obligation on the employee to find themselves someting else to do in the company. They should be conducted in a meaningful and engaged manner before any irreversible decisions to terminate roles. The purpose of a consultation is to make change where is necessary, but to do that in a humane way which also takes into account and derives benefit from an exchange between worker and manager.
Redundancy consultations can be valuable in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. Consultations are a valuable right for employees. Employers should begin the consultations at the earliest suitable stage of any proposed changes to the workplace where redundancies are a consideration.
Gary Pinchen’s thoughts on Australian Redundancy Laws
A redundancy can be a bad redundancy, but still be a genuine redundancy, Employers make the wrong employees redundant all the time. What they cannot do is target you because you have complained about something, been on Workcover, you are pregnant or replace you with a lower paid worker. Renaming the position and employing someone else in that position is not a genuine redundancy. These are just some of the reasons that I have seen. No job is guaranteed for life. Situations can occur such as recession or closure of product lines that can make positions genuinely redundant.
It’s what you know. (check on-line to see if your position or similar position is advertised). Why are you targeted? With the current recession, it can be sometimes referred to as pay back, perceived troublesome Employees have to go, older, injured, ill, ones insisting on being paid properly.
Why if you’re a good loyal, productive employee would they really get rid of you. It’s all about the motive, as to why would an Employer go to the time and cost to get you out of their business. Give us at A Whole New Approach P/L a call to work through your situation.
Be aware genuine redundancy tax benefits (many aren’t)
A genuine redundancy payment is a payment made to you as an employee, if your job is abolished and you no longer have a job. This means your employer has made a decision that your job no longer exists, and your employment is to be terminated.
Your genuine redundancy payment is:
- tax-free up to a limit based on your years of service
- concessionally taxed as an employment termination payment (ETP) above your tax-free limit
- taxed at your usual marginal tax rate for any amount above certain caps.
The tax-free amount is not part of the employee’s ETP. Your employer will report any lump sum amounts on your income statement or PAYG payment summary – individual non-business.
Any amount over the tax-free limit is part of the employee’s ETP.
https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Leaving-your-job/Redundancy-payments/
Consultation, what’s it really mean?
Consultation is more than the Employer telling you they are making you redundant. They have had a look around and there is nothing else for you. Consultation has to be legitimate. It has to be in advance of the potential redundancy. It allows for your input, and the Employer has to consider your input, before the decision is made.
Maybe you will take a lower position, maybe you have experience, skills or qualification’s the Employer is unaware of, it’s your absolute right to have those discussions in advance of the potential redundancy.
Redeployed, if its larger company clearly there may be options, the Employer may still be employing casuals, contractors, staff still in their probation period, why weren’t you offered these positions, you may have been prepared to travel, reskill with little effort, that’s why consultation is important.
Some Employers indicate now that we are making you redundant, can you resign, under no circumstances do you resign, get advice first. Redundancy entitlements can be allot of money, explore your options. This commentary is short and meant to start the process of you deciding is there anything you can do about your redundancy situation. Ring us anytime,
“Knowledge is power, without it we become ignorant towards the truth.”
― Hopal Green
Be postive move on
I’m very aware I “haven’t walked a mile in your shoes”. Many commentors talk about time off, relax, catch your breath. (yeah, but what about the bills). I’m from the tough love school of get on with it, get back on the horse and keep going. Tweddell a academic talks about having three choices: stick, twist or bust. ‘Stick to what you’re doing, but find a way to upgrade: a better employer, terms, locations, hours – whatever works for you.’ Twist means you ‘stick to your expertise but twist how you deliver it. Go freelance, be a consultant, teach it.’ Finally, with bust, you ‘throw everything in the air, start again, retrain, start a business, do something completely different.’
The choice must be yours and you need to know why you are doing it, she continues. ‘Don’t be afraid to get the next move wrong. You can try something and change your mind. The key is to try and give yourself the best chance of doing something you enjoy. Don’t rush into making a decision. Know why you are doing what you are doing and give new things at least three months before you decide what’s next.’
Usually employees start looking for roles that exactly match your skill set, or mirror those from your previous position. However this can limit your options – it’s much better to cast a wider net and give yourself more chances of getting a job. I suggest to many employees get a casual job, get some consulting work, even volunteer, extend your skills. If your a older employee its about extending your work life. Don’t creat a boom or bust scenario, be flexible.
Here you can think about the wish list that is the aspects of what you want from your career, and your future life. Life is about positive purpose, you wanting to get up in the morning and have nice day. There is a connection between poor mental health and poor physical health outcomes. I see this all the time with employees in their late 50’s or early 60’s. What’s the point in working for 40 years., paying the house off, plenty in your super, then you get an illness, never recover or die. (one in 4 males and one in 5 females don’t make it to 65, there the stat’s). “I want to break free” the song by the band Queen can be quite relevent in these circumstances.
Conclusion
I hope this article has been informative for you. If you are facing your own redundancy dilemma? or facing an unfair dismissal?. Or a dismissal that appears face of it appears fair. However you have a feeling its dodgy, give us a call. we are here to help, advice is free, honest, and to the point, 30 years experience and counting. We are passionate about what we do. AWNA are here for you, have been sacked, we have been uncertain about what the future holds, we understand you. Anything to do with termination of employment, we are the go to guys. All Fair work matters, workers rights, casual employment concerns. probation issues, abandonment of employment.
Free Call 1800 333 666 for free, prompt advice
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