Considering Redundancy during COVID-19

Most businesses have been (and still are), affected in different ways throughout the COVID-19 Pandemic.

In many cases, sales/business is well down and employees that were busy prior, are now not required to work as much as they did, if at all.

JobKeeper legislation has certainly helped businesses that fit the eligibility criteria, but there are others that do not qualify but still need to change their workforce.

This can be done by agreement in some cases, where an employer and employee can openly discuss the current situation of the business and come to an arrangement that is the best possible outcome for both parties.

But what happens if no agreement can be made? What if this situation has indeed forced the business to change what it does ongoing, and jobs that were once part of the company, are no longer? You may be looking at redundancy.

Here is an overview of what redundancy is and how it works:

Redundancy is when an employer doesn’t need an employee’s job to be done by anyone.

Redundancy is about the job being made redundant, not the person.

So how does a business “get” to a redundancy?

There is a trigger-event or change

For a “true” redundancy, there needs to be a change/event that has occurred that is the trigger that means the job is no longer required to be done by anyone.

Some examples may include:

New technology (e.g. the job can be done by a machine)
Slow down due to lower sales or production, perhaps a worldwide pandemic
Restructure, Merger, Takeover

If there is a trigger-event or change, how does this affect job/s and team members?

What job or jobs are affected by the trigger event/change?
Which staff members are currently performing those jobs?
If you have multiple people performing a job, how are you going to decide which people will be affected? In this process, be sure not to discriminate against employees – it needs to be a business decision.

Communicate to staff

The more transparent you can be in these situations the better. The types of communication you should be looking at are:

Informing employees about changes within the business that may affect their working arrangements;
Providing employees with an opportunity to ask questions; and
Consider all options and alternatives to redundancies, such as redeployment, job sharing and reduced overtime.

NOTE: If your employees are employed under and Enterprise Agreement, there may be specific process that needs to be followed.

Making the decision

Following the communication phase, decide what change(s) you are going to make.

It may well be that the employee agrees to a change of role, a reduction in hours or some other change. It may also be the case that there is no way the team member can remain at the organisation and needs to be terminated due to their position being redundant.

Finalise the changes

Changes

Notice of the agreed changes in position and duties must be given in writing.

Redundancy

If you can no longer employ the individual and the position that the incumbent had is no longer viable for the business to maintain, then as this is effectively a termination of employment, youmay have to make a final payment to that employee.

This final payment may need to include for example:

Redundancy payment
Payment in lieu of notice
Entitlements (Annual Leave, Long Service Leave etc)

You should also provide a letter outlining the outcome.

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