In its August Statement on Monetary Policy, the Reserve Bank of Australia reported that the COVID-19 pandemic represents the largest shock to the global economy in many decades and that labour markets have been severely disrupted. In light of this statement, employers should start planning their redundancy strategies.
According to the statement:
- more than 850,000 jobs were lost in April and May and increased by around 200,000 in June;
- the number of job losses to date and the increase in unemployment would have been much greater if it wasn't for the JobKeeper scheme; and
- unemployment is now predicted to reach 10% by the end of the year and still be at 8.5% in December next year.
Organisations have been implementing different measures with the aim of curtailing expenditure, such as reducing employees' hours or days of work and encouraging the taking annual or unpaid leave. But unfortunately, it will be inevitable that some employers will be considering redundancies as a last resort to cut costs.
In a statement released last week, the Fair Work Commission's President stated that there has been a spike in the number of unfair dismissal applications since March 2020 (including with respect to "genuine redundancies") which were almost 67% higher than the previous year.
With this in mind, it is important that employers have in place good redundancy strategies to mitigate against the risks of unfair dismissal and general protections applications. For example, organisations must ensure that they are aware of, and compliant with, any obligations during the redundancy process, such as consultation under any applicable industrial instrument.
Tips for Redundancy Strategies
When considering redundancy strategies, employers must pay particular attention to how they will communicate about the redundancy process.
If communication is poorly handled, then an employer runs the risk of damaging its brand in the marketplace and its relationship with remaining employees, which in fact may jeopardise the organisation in the long-term.
- plan consultation strategies – what are you going to do, how are you going to do it, with whom are you going to consult;
- have it right – be up front and transparent, open and accountable;
- with unions – comply with any existing communications protocols; and
- communicate externally – consider what is your organisation's media message.
PCS regularly assists organisations with their planning around redundancy strategies and process implementation. Get in touch with us today to discuss your organisation's needs.
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.