How Not To Treat Employees In A Redundancy Situation

By CCH

When deciding to make an employee redundant, employers should ensure the termination is handled fairly, or they risk a successful unfair dismissal claim.

In a recent case the NSW Industrial Relations Commission has set out the obligations of an employer and of an employee when the employee is made redundant.

The employer needs to:

· give reasonable notice to the employee and/or their union;

· adequately consult

· explore genuine alternatives for redundancy such as redeployment and relocation

· ensure other options are offered fairly

· provide reasonable standards of redundancy benefits

· provide appropriate ancillary services such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning

· ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis.

There are reciprocal obligations on employees, including:

· a willingness to participate in consultation with the employer

· genuinely participating in exploring alternatives to redundancy

· not unreasonably refusing to accept retraining, alternative employment, redeployment or relocation.

Neal v Shaw McDonald Pty Ltd and another [2003] NSWIRComm 298, Sams DP, 22/09/2003.

(CCH Industrial Law News. issue 10, 16 October 2003)