Current economic conditions and industrial changes in Western
Australia are putting a lot of strain on the viability of
In order to survive, many businesses have to restructure their
workplace. This often results in reducing surplus assets,
addressing inefficiencies, and cutting or removing shifts. The
redundancies that result from this process present a significant
legal risk to employers.
The last thing you need to deal with during a cost-cutting
operation is a costly legal case being brought against you.
It's important to consult an employment lawyer to mitigate this
An employee's position is made redundant when an employer no
longer requires that job to be performed by anyone due to
operational changes. Some employees are entitled to redundancy pay
when they have been made redundant. It's important to
understand the laws around redundancies to ensure you comply with
your legal obligations and avoid damaging penalties.
Industrial instruments such as awards, employment contracts or
collective agreements can provide employees with a right to receive
redundancy pay. All employees covered by the national system of
industrial relations are entitled to redundancy pay, as it forms
one of the National Employment Standards.
Redundancy entitlements may differ if your organisation falls
under the state system or if employees are covered by a modern
award or enterprise agreement.
To be eligible for redundancy pay, the employee must have
completed at least 12 months of continuous service with their
employer and their employer must have more than 15 employees. The
longer the employee worked in the service of the employer, the more
redundancy pay they are entitled to, ranging from 4 weeks of pay to
16 weeks of pay.
Redundant employees may also be entitled to other payments such
as accrued annual leave and unpaid wages. Casual employees,
probationary employees, apprentices, trainees, fixed contract
employees and employees terminated for serious misconduct are not
entitled to redundancy pay.
Employees who are made redundant cannot make an unfair dismissal
claim unless they can prove it was not a genuine redundancy or that
they were not fairly selected for redundancy. This makes it
important to understand redundancy law and follow a correct and
BUSINESS RESTRUCTURING PROCEDURE
Since business restructures are driven by market demands and
economic conditions, operational and financial issues can dominate
executive thinking. It's important to consider HR legal issues
early on to avoid problems later down the track.
Employers must meet their required consultation and notification
obligations to their employees. This should involve informing
affected employees and listening to their views. Explore every
possible alternative employment option for affected employees and
ensure that you plan and document the redundancy process. Remember
that redundancy is about the position, not the person.
Every organisation's restructuring process is different. A
"one size fits all" approach won't work well. An
employment lawyer can provide advice and a tailored service that
provides an ideal procedure for restructuring your business.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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