Australian Business Guide to Low Pain Redundancies

Redundancy Laws Australia
Photo by Tim Gouw on Unsplash 

Australia is going through a current crisis of employment due to a large number of factors, not the least of which being the CoVID pandemic which is still leaving many of us to deal with the fallout. Employers are  facing tough decisions about which positions and staff they can afford to keep and maintain their business viability.  With some employers ultimately making the decision to restructure, to cut jobs and to  make employees redundant it can leave many scratching their heads as to how to cope or manage the situation. 

Redundancy laws in Australia are, thankfully, noticeably clear cut. They depend on the amount of time that the employee has been with the employer. For specific notice times as they relate to time accrued please visit this site.  

Redundancy payouts are reflective of time served (see above link) and do not encompass various leave payments et al. For example, incentive based payment and bonuses as well as overtime rates do not factor into this decision making process. This may leave a sour taste in the mouth of the redundant employee.  

Redundancy payments do not apply to all employees. Those who have been employed for less than one year, employees who take on a contract position for a specified amount of time, casual employees, trainees and apprentices and those fired for misconduct or for those employed by a small business of less than 15 employees are not entitled to redundancy pay.  

If you are at all unsure about your legal obligations towards your employees and their entitlements, you should contact Fair Work on 13 13 94 or seek independent legal advice from specialist Employment lawyers. 

Difficulty Coping with the Decision

As you might expect, employees who are made redundant often feel awful about the decision. Some may be facing the prospect of applying for a new job for the first time in a very long time and can be overwhelmed by the uncertain and unfamiliar future. Redundancy can leave employees questioning their worth and their place in the world and they may lash out.  

Having made the decision to make positions redundant, it can seem easiest to simply pay out the exiting employee’s notice and all other entitlements and have them off premises immediately to avoid disruptive behaviour.  This is not necessarily the best course of action.  It can lead to your business suffering wider reputational problems, lack of engagement by the remaining employees and, ultimately, higher and more costly staff turnover. 

Forging ahead with conversations that involve HR in a compassionate, empathetic way is the best way to approach this situation.  Offering counselling and retraining services to support the redundant employee will demonstrate your capacity as a responsible employer who looks after their employees.  Kindness goes a long way and it’s best to leave the employee reflecting on their experience positively. 

Survivor Syndrome

Workplaces can reel in the wake of redundancies. Those who are left unscathed often build resentment towards management that oversaw their friends leave or they may feel very anxious about their own positions. Remaining employees who feel uncertain about their own position, or feel that their employer cannot be trusted to treat them with dignity can: 

  • create further discord within the remaining workforce; 
  • start look elsewhere for employment, potentially leaving you short-staffed, under-skilled and facing increasing recruitment costs; 
  • damage your reputation externally as an employer and as a business. 

Again, transparency is key as is compassion and kindness.  Demonstrating your commitment to the business and expressing compassion for the exiting employees will assist in reassuring the remaining staff and ideally result in an engaged and focused work environment 

Timely Use of Outplacement

Aside from the finalisation of entitlements for employees, the measures required to transition those employees out of your employment with the minimum of disruption to business as usual can be best achieved by engaging outplacement services.  Career transition as well as the importance of mental health are paramount and the ultimate goal of the outplacement team is to provide support with the aim of a seamless process in mind.  

Having made the decision to cut the business workforce and make positions redundant, the prospect of actually implementing the redundancy process can seem daunting to many employers.  HR staff responsible for delivering redundancy news to current employees may also struggle with the redundancy process in addition to their usual duties and require support.  

Outplacement services offer transitional measures between the HR department and the outgoing member of staff by delivering support around emotional needs, offering practical advice, assisting employees to identify and build on their transferrable soft-skills to make them more employable in a tight job market, offering career counselling and assisting with CV compilation.   

Outplacement demonstrates a commitment to your employees and manages expectations of those who are leaving and those who are left behind, fostering a culture of positivity and goodwill as opposed to mistrust and anxiety. 

Low Pain Redundancies = Better Business Outcomes

Redundancies are painful.  For everyone.  For the employer being forced to make tough financial and personnel decisions, for the redundant employees and for the remaining staff.  For business to continue in the best shape going forward you will need the trust and goodwill of the remaining employees. This is best achieved by: 

  1. Ensuring you meet all your legal obligations to redundant employees; 
  2. Being compassionate in your dealings with exiting employees;
  3. Offering transitional support during redundancy; 
  4. Being transparent about why redundancies are occurring; 
  5. Demonstrating your commitment to the business and the remaining employees.

The additional costs of engaging outplacement services, to transition redundant employees and offer emotional and career support, is generally offset by the decreased likelihood of loss in productivity due to poor staff morale in your remaining workforce.  

Retention of remaining staff – that you chose to keep because they best meet your business needs whether in respect of skills, financial or other considerations – is critical at a time when you are shrinking your workforce.  Exiting staff take with them their inherent knowledge base of your business operations and their ability to train others with their knowledge. 

When the remaining workforce retains trust in their employer they are far more likely to be focussed and productive at work and less likely to be looking for alternative employment. 

Kris Reynolds, Lets Talk Career

Contributor: Kris Reynolds is a career specialist who, after decades of assisting executives to reach new career heights, now supports those same senior managers in handling new rounds of redundancies.  Kris provides Outplacement Services to blue and white-collar workers, assisting them to be ready for, and to secure new opportunities.  

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