Dynamic Business

Alternatives to termination
Unless an applicable workplace agreement or policy provides for it, employers are under no obligation to offer redeployment options to employees in positions declared redundant. However, if employers want to consider redeployment options, it is important to note that they cannot unilaterally change employees’ terms and conditions of employment. If an employer wants to offer to an employee in a position declared redundant an alternative position with different duties and responsibilities and different remuneration benefits, they will need the employee to agree to the new position.

Other alternatives to implementing redundancies could be negotiating with employees to take annual leave and long service leave entitlements, or negotiating with employees to work reduced hours or reduced days.

Future considerations
It is important to note that the laws on redundancy will be subject to considerable change with the introduction of the Federal Government’s Fair Work reforms.

Of specific importance is:

• From 1 July 2009, all employers will again be subject to the unfair dismissal regime and the circumstances where employers can justify terminations on operational grounds will be significantly reduced. Generally, this means when terminating an employee because of redundancy, an employer will be required to show that prior to implementing the redundancy they undertook a thorough investigation and review to ascertain they no longer needed the redundant position, they consulted with the affected employee, and they considered all possible redeployment options within the employer and its associated entities.
• From 1 January 2010, the National Employment Standards (NES) will commence operating. The NES will contain the minimum employment entitlements that will apply to all employees. Included in the NES will be a guaranteed entitlement to redundancy/severance payments for all employees whose employment is terminated because of redundancy and who are employed by an employer of 15 or more employees at the time of the termination of their employment.

This means that for the first time, many employees terminated because of redundancy who are not covered by awards, workplace agreements or redundancy policies, will have an entitlement to redundancy/severance payments.

With the above in mind, we recommend employers act now to address any needs for workforce reductions.

—Alison Baker is a partner with Hall and Wilcox (www.hallandwilcox.com.au)

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