An employer that is considering making an employee redundant most likely has a legal obligation to consult with the employee prior to making the final decision to make an employee redundant.
The obligation to consult with employees applies to employers who are covered by an Enterprise Agreement or Modern Award which includes a consultation requirement (this covers most employees).
The consultation that must occur must be genuine. The employer must disclose to the employee the operational requirements that have led to the decision being made and the reasons for the likely redundancy. The employer must give the employee an opportunity to be heard prior to any final decision being made. Further, the consultation must include consideration as to opportunities for deployment (employment elsewhere within the business).
Consultation will not be considered genuine if at the time of the consultation the decision to terminate has already been made.
It is important to note that the consultation which must occur is about the operational requirements of the business and how they can best be fulfilled. If the decision is made to make an employee redundant, the employer must establish that what motivated its decision was the genuine operational requirements of the business. Whether it was fair for the employer to make the position redundant is irrelevant as the way that an employer structures its business is entirely a matter for the employer.
What happens when consultation does not occur or the consultation is not genuine?
If there is a requirement to consult and the consultation has not occurred or the consultation was not genuine, then the redundancy is not genuine at law. This will be the case even if there was a valid reason for the redundancy. This then enables an employee to seek compensation by making a claim for relief from unfair dismissal and /or breach of Enterprise Agreement. The compensation that will be paid will depend on the circumstances.
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