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The HR / People Functional Role in Redundancy in Australia

11.07.22 03:39 PM By Linq HR

It seems that there are a growing number of reports appearing lately about companies in Australia unfortunately having to reduce staff or sadly closing forever.  Companies such as neobank Volt. 

Often the HR / People Function is involved at an early stage of identifying redundancies but sometimes they aren’t and it comes as a surprise. Nevertheless the role of supporting the business and employees continues.

Is the Redundancy Genuine

If the business has decided to reduce roles then the first question is usually to determine whether the redundant roles are genuine redundancies. In larger organisations this is more complex as the ability to transfer is often seen as more available. Roles are genuine redundancies if they no longer exist or are no longer required by the Company. 

If work is being transferred to others, or outsourced, then closer examination by the HR / People function is often required to ensure that redundancies are genuine. Redundancies must also not be for prohibited reasons such as pregnancy.

Consultation with those Affected

Besides any legal obligations to consult with employees and explore any reasonable redeployment alternatives, it is often just good practice.

Employees doing the work can bring different perspectives about how it can be reassigned and has resulted in better outcomes for some companies and remaining employees. 

Consultation doesn’t necessarily mean the company needs to stop or slow down redundancies to resolve their business challenges but it does allow all those affected to try and find a better solution.

Welfare and Support

If a company is reducing staff then it is often cost related with the company only wanting to spend a minimum amount to finalise those redundancies.

Besides support from the internal HR/People function, to reduce the shock to employees and help them start to focus on securing a future role some companies provide professional outplacement services. 

Outplacement or Career Transition services can assist by being onsite and meeting with affected employees when first told of their redundancies, and immediately start assisting with personally preparing for transition. Employees who receive this type of support can often maintain a more favourable view of their former employers once they have secured new employment.

Many companies provide Employee Assistance Programs (EAP). Employees can be reminded of how to contact their EAP to assist if they are experiencing any personal difficulties as a result of the change.

Final Payments

Employees can have different employment arrangements so its important to determine the underlying agreement or award to determine final payments.

Some employees such as casual, fixed term or small business employees could be exempted from redundancy payments.

Redundancy payments are linked to the length of employment. For more senior employees there may be other items to finalise such as pro-rata bonus payments, vehicle arrangements, and cancellation of corporate credit cards and electronic accesses.

So regardless of at what stage the HR / People Function becomes involved in redundancies it is important they assist the business and employees by checking and assessing whether redundancies are genuine, that there is sufficient consultation with affected employees, their welfare is supported, and all final arrangements such as proper payments are properly calculated and provided.

If the redundancy situation is unclear or complex to either the business leaders or the HR / People Function then it can be prudent to consider seeking professional workplace legal advice to help finalise the company’s approach.

Linq HR specialises in finding HR Vendors for companies and can assist finding Workplace Lawyers, Outplacement Specialists, and EAP providers.