Mishandling a redundancy can lead to a personal grievance claim, which can cost a small employer around $35,000, says Employment Law Experts director Kristina Andersen. She shares her insights on managing redundancies correctly.
“If a redundancy arises from restructuring, it must be genuine, fair and reasonable. The employer must act in good faith, consult with employees who may be affected, provide them with access to information, give them the opportunity to comment on the proposals and consider those comments before making a decision.
“If several employees are affected, then it is advisable to give them prior warning of a meeting to discuss the proposal, then at the meeting they can be given additional information and the chance to ask questions.
“If this is one on one, then it is safest to approach this like a performance process, by outlining what the meeting will deal with and allowing them to bring someone with them.
“There are two main areas where employers get it wrong: procedural and substantive errors.
“Procedural issues arise when an employer announces that employees are redundant, without prior discussion or consultation.
“Substantive issues arise when the redundancy is not genuine. Such as, an employer wants to get rid of a non-performing employee or it is issued on illegal or unfair grounds, such as discrimination.
“In one case an employee who suffered a major personal tragedy was selected for redundancy because they didn't look happy. If the employer provides no information or takes the employee’s opinion into account, then this can also create legal consequences for the employer.
“For those employees who are selected for redundancy, offering EAP, paid time off for interviews, and other help can go a long way to fixing any hurt feelings.
“Even if the redundancy is genuine, those other issues risk creating the wrong impression. One wrong word in the employee’s documentation can create the impression that the outcome has been predetermined, leading to a personal grievance claim.”
