The ASU receives many enquiries from members who are facing the prospect of being made redundant (or retrenched). Being retrenched can be a very unpleasant process which can be emotionally and psychologically draining but the ASU can assist you in dealing with a redundancy and whether it is being or has been done an appropriate way.
It is important to note that generally speaking the employer has a right to structure the company or organisation in way they deem appropriate and this is often referred to as ‘managerial prerogative’. Even if the employee affected believes what is being done is not beneficial to staff or to an individual, the employer may undertake a restructure as they see fit. The important thing to know is that if the employee is retrenched, it means that the job no longer exists even if the duties are dispersed to other staff in the company or organisation.
Whilst the employer may want to restructure however they see fit, there are still a number of obligations within which they are bound to. They are summed up as follows:
- As long as the employee has a clause in their collective agreement, award, contract of employment or company policy the employer must consult with you prior to terminating your employment. The consultation should include discussion about the impending redundancy and what can be done to ‘mitigate the adverse effects’ of the redundancy which could involve various options.
- If the employer is obliged to consult with the employee the employer would need to demonstrate that they have discussed the matter in detail with you prior to terminating your employment. It is not simply the case that the employer can tell you about the redundancy one day and terminate your employment the next day.
- Regardless of the obligation to consult, the employer is bound to investigate options and where ‘reasonable’ to deploy you within the company or an employer associated entity. This matter is a requirement under the Fair Work Act 2009 and there exists a number of cases where the employee has been found to have been unfairly dismissed on the basis that they could have been redeployed.
If these issues have been met and no alternative job can be found for the individual then the employer is bound to provide the following:
- A formal notice of the termination of employment with appropriate notice or payment in lieu of notice. The period of notice or payment in lieu is identified in the Fair Work Act 2009 as a minimum and operates on a sliding scale dependent on years of service and age. If the employee has one, their workplace agreement or contract of employment may provide for additional entitlements.
- The employer, if the business has more than fifteen employees, is also bound to provide severance pay. Once again the Fair Work Act 2009 provides the minimum entitlements an employee is to receive. They operate on a sliding scale dependent on the years of service. Employees may be eligible for severance payments above and beyond those identified in the Act where a workplace agreement, contract of employment or company policy operates.
- The employer is also bound to provide accrued leave entitlements such as annual and long service leave where applicable.
In cases of retrenchment an employee may often wonder why they have been identified for redundancy instead of someone else. However the employer once again has a certain amount of perogative in determining this. If the employee believes they were targeted for redundancy because they are a union member or because they have pursued a workplace right, then they may have a case for unlawful dismissal. If the choice was made for discriminatory reasons such as race, age, sex or disability they may also have grounds to make an unlawful dismissal application. The employers’ decision to retrench an individual must be made on a sound basis and hopefully not as a pretext for some other issue.
The above information has been provided on a basis of general assistance to members. The ASU fully appreciates that individuals have their particular circumstances or issues in regard to being made redundant, and would recommend that members contact the Union if they are in any doubt as to whether they are being properly treated in the event of having to deal with being retrenched.