Tuesday, 26 February 2013

Getting redundancies right

It’s an unfortunate reality in today’s volatile economic climate and managing redundancies in the workplace is a delicate process that requires professionalism, empathy and a clear set of guidelines.

By having a change management strategy in place employers can minimise the disruption to their organisation and ensure that their employees are treated fairly and with dignity in the process.

Employers must firstly establish valid grounds for redundancy. This may be due to economics, takeovers, restructures or technological change. Once the reason behind the redundancy is clear it is important to consult with your staff sharing with them the situation and likely changes when there are multiple redundancies planned. Allow your staff to respond, ask questions and seek clarification on their selection in redundancies.

A six-step approach

This six-step approach below can help employers manage their risk and ensure that the process is conducted professionally and fairly.

Step 1: Plan the process carefully – selection, consultation, communication and implementation

Step 2: Establish a fair selection criteria based on the job and not on personal and potentially discriminatory characteristics

Step 3: Apply the same selection criteria to each affected employee doing the same role

Step 4: Provide procedural and substantive fairness by allowing the employee an opportunity to respond

Step 5: Consider redeployment opportunities for the employee(s) in any and all related entities

Step 6: Consider offering voluntary redundancies to the group at risk of retrenchment if strategically appropriate

Non-genuine redundancy

You should also know that under the Fair Work Act, bone fide redundancies cannot be claimed as unfair dismissal but non-genuine redundancies can.

A redundancy to be genuine will satisfy the following requirements:

·         the employee’s position was redundant

·         the employer complied with any obligation regarding consultation and

·         that it would not have been reasonable for the employee to be redeployed

This approach will help ensure that you manage any retrenchments in accordance with the Fair Work Act.

About The People Department

The People Department meets the needs of small and medium businesses that don’t have HR expertise in-house and larger organisations who need specific expertise on projects. We are the Human Resources Department for businesses that only need it part-time or short-term and we do HR the way you want it. Find out more on our website thepeopledepartment.com.au or call us on 1300 362 344.

The People Department was created so that great people management practices could be accessible to businesses of all sizes. The People Department was co-founded by Angela Becroft and Samantha Baker. Sam, Ang and the team have had long careers in Human Resources and business management in start-ups and multi-nationals both here and overseas and across many different industries.

Disclaimer: Please note that the information in this post or links does not constitute legal advice and should not be relied upon as such. The People Department does not accept liability for any loss or damage that may arise from any such reliance.

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