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Consultation – Essential for a ‘Genuine Redundancy’

Most employers are generally aware that a ‘genuine redundancy’ is a complete defence to an unfair dismissal claim. However, a redundancy is not rendered ‘genuine’ simply because the redundancy is justified or necessary. The Fair Work Act 2009 (‘the FW Act’) requires employers to undertake a consultation process prior to the implementation of redundancies.

The consultation process requires employers to give employees adequate notice of potential workplace changes (i.e. redundancies), and discuss what steps can be taken to mitigate the effects of the workplace changes.

Section 385 of the FW Act provides that a person will be unfairly dismissed if (amongst other things) the “the dismissal was not a case of genuine redundancy”. Section 389(1) of the FW Act provides that a ‘genuine redundancy’ is a dismissal where:

  • the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
  • the employer has complied with any obligation in a modern award or enterprise agreement to consult about the redundancy.
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