Removing staff that are not performing can be a protracted and
convoluted process. For a long time, employers have often seen
redundancy as an avenue for side stepping the various
disciplinary/counselling sessions/warnings that have to occur prior
to an employee being terminated for poor performance.
The beauty of the redundancy was that you could simply tell the
employee that their position was no longer required and they were
If the employer consults with the affected staff member (where
an award employee) and looks for any alternative roles internally,
a genuine redundancy remains one of the exceptions to the unfair
dismissal division under the Fair Work Act.
So, is it still really the 'simpler' option for removing
The short answer is 'yes'. The basic position is that it
is still open to the employers to make decisions about their
organisations and which positions are required for their
business' productive functioning.
The concept of the redundancy is not that you are getting rid of
a particular individual but that you have decided that that
particular role is no longer required (and thus the individual is
terminated). The role may no longer be required because either:
you have outsourced it to a third party and/or ceased to
require those duties to be done by anyone in the company; or
managed to restructure the role in a way that the duties
attached to that position were shared out amongst other remaining
In either situation, the position ceases and because the
position is no longer required the employee is terminated.
The first option is generally easy to discern, but the second
situation is less clear.
How many duties need to be taken away before a job is – in
effect – a different role?
This question was recently considered by the Court of Appeal in
New South Wales (UGL Rail Services Pty Limited v Janik NSWCA 19
December 2014). It arose where an employee was terminated and
another employee then assumed a role with similar (but not the
same) duties. The terminated employee claimed his termination was a
In the leading decision in that case, the judge expressed the
view that a redundancy arises where:
"...the duties and responsibilities of the position are
so substantially altered that is largely stripped of its
It is a question of degree. The judge looked very closely at the
position description and the actual duties carried out by the
employee that had been terminated and the person that (after the
former's termination) occupied a similar position. The judge
found that the key responsibilities of both the terminated worker
and his 'successor' were very similar and - therefore
– it was not a sufficiently different role as to classify the
termination as a redundancy.
Redundancy is still an important management prerogative to
ensure a business viability and productivity but care needs to be
taken with the process.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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