So you’ve decided to make a redundancy – do you know your obligations?

Amid higher rates of redundancies at increasingly larger scales, experts are clarifying common mistakes around the obvious – and less obvious – redundancy misconceptions.

In a training webinar presented by Harmers Workplace Lawyers, senior associate and team leader Mariam Chalak discussed how businesses can approach restructuring, the meaning of “genuine” redundancy and how best to conduct consultation.

Chalak opened the webinar by reinforcing that the legal framework around redundancy in Australia recognises the reality of the redundancy experience for employees – that is, it is a stressful, and for some, life-altering experience.

In this way, restructuring should not be conducted lightly and, as Chalak noted, should be approached with the question of “what the business is trying to achieve, what services it needs to provide, how the work should be organisation and what the appropriate organisation structure looks like”, rather than simply looking at it from an individual role basis.

Broadly speaking, it requires a consideration of how proceedings will impact people which will, more often than not, require consultation

Chalak said: “Consultation isn’t simply about telling employees what is going to happen. It’s more than just an information flow. It needs to be meaningful, timely and genuine.

“You need to give people enough information to understand what’s happening, an opportunity to respond and genuinely consider the feedback that you receive from those employees.”

Approaching redundancy from this understanding also limits the risk of psychosocial harm to an employee and organisation exposure to legal claims such as unfair dismissals, enterprise agreement disputes and safety regulator intervention.

Referencing the landmark 2025 redundancy consultation intervention due to the psychological hazard it posed to staff, Chalak said key takeaways are providing sufficient information about the change and its likely impact, explaining the reason for the proposed change and providing employees with a real opportunity to respond, as well as considering any measures that could mitigate adverse effects on employees.

While asserting that meaningful consultations involve employees, she said: “Consultation does not require consensus.

“The employer is ultimately entitled to make the business decision, but in saying that, the employer has to genuinely listen to and consider the views of its employees … a proper consultation process requires the employer to maintain an open mind and be prepared to alter the proposed approach where an employee raises a viable alternative.”

As such, Chalak said that any restructuring should be approached as a change management and leadership exercise, rather than – as organisations are prone to do – a legal or procedural exercise. In practice, this looks like a firm and clear business rationale for the restructure, reflective job design and a considered organisational structure.

While noting that there isn’t a single, correct approach to suit every restructure, Chalak explained that ongoing communication is crucial no matter the nature, scale, industry, business imperative and industrial obligation of the process.

Further, while some considerations such as the Fair Work Act, relevant awards and enterprise agreements, as well as internal workplace policies, will be front of mind, Chalak explained that certain legal instruments are not always straightforward.

She said: “For example, a business may have a redundancy policy that is significantly more generous than the obligations in the Fair Work Act and the National Employment Standards. Further, some employees may be covered by an award or an enterprise agreement, in which case additional obligations arise around consultation and the way consultation needs to be carried out.”

In this way, Chalak urged employers to review industry awards and to consider dispute resolution processes “along the broader change management process”.

She said: “A legally compliant process can still be poorly managed if employees are not given sufficient information, time or opportunity to understand and respond to the proposed changes, and if there’s misinformation that’s communicated with respect to their rights.”

Further, she clarified that consultation may not always be mandatory, unless obligations are set out by an award of enterprise agreement.

Acknowledging the difficulty in determining whether an employee award is covered, she said: “We would still recommend that a consultation process is carried out just to err on the side of safety.”

“It only adds about an additional week or two to the process, but it can act as a significant risk mitigation strategy, especially if the matter is litigated or contested. And also from a psychosocial perspective, it can provide employees with an opportunity to be heard and just reduce some of the stressful impacts that arise with a redundancy.”

Moving onto the actual selection process, Chalak explained that the focus should be on the job rather than the individual employee. Referencing section 389 of the act that sets out a dismissal constitutes a genuine redundancy “where the employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the enterprise”, Chalak further noted that many employers hold the misconception that the fact the work continues to be performance means it prevents the possibility of redundancy.

However, functions previously performed by one position can be redistributed among other employees as part of a restructure are valid if the original position is no longer required.

In this way, the relevant question for employers is whether there is an ongoing need for that job to be performed, rather than whether the underlying functions are ceasing to exist.

Chalak also explained that employers are often unaware that dismissals do not constitute genuine redundancies if it would have been reasonable to deploy the employee within their employer’s enterprise or an associated entity – and that missing this can again expose the organisation to legal action which is both “very expensive … and also embarrassing”.

With regards to notification and scale obligations, Chalak clarified that employees should be provided with adequate information, but that this does not require the sharing of unnecessarily confidential commercial information, but rather information necessary for the employee to understand what is proposed, and why.

She said: “There’s also a specific notification obligation where an employer is considering making 15 or more employees redundant. In those circumstances, the employer must give Services Australia written notification of the proposed dismissals, the number and categories of employees likely to be affected and the timing of the proposed dismissals.”

In addition, “it’s worth keeping in mind that this is separate and distinct from the employment separation certificate. That’s a completely different obligation which arises where an employee’s employment ends and Services Australia or the employee requests a certificate.”

Finally, Chalak touched on the selection process, noting the importance of basing decisions on objective, transparent and lawful criteria. This may include qualifications, training, experience, employment and performance history – but with a caveat.

Chalak said: “Where performance or conduct-related information is relied upon as part of a selection process, it’s important that the employer has appropriately managed and documented those issues beforehand.

“Relying on undocumented performance concerns at the point of redundancy creates obvious risks.”

Lack of record-keeping has often been the reason the Fair Work Commission has determined an unfair dismissal where it otherwise might have been found to be reasonable.

Broadly speaking, Chalak urged employers to consider the legal process as one part of managing organisational change.

She said: “The overarching message is quite straightforward: a restructure is both a business process and a people process”.

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