With the huge amount of change small businesses are facing at the moment there are many people facing redundancy. As employers, it’s important to follow the steps correctly, both for you and for your employees.
First of all, it’s important to understand the difference between a redundancy and a temporary stand-down. A temporary stand-down is just that, temporary. If the stand-down is considered a permanent one then this becomes a redundancy.
If you are considering making an employee redundant there are three things you must consider to avoid a potential Unfair Dismissal claim in the future:
1. The business no longer requires the role.
If duties can be absorbed by other people still working, or the nature of the business is changing, then a redundancy is valid. You’ll need to decide if you need to let the person go completely, or whether you’re able to redeploy them to other tasks within your business.
Once this decision is finalised you need to let the employee know by letter. We can help you draft termination or redeployment letters if needed. We can also advise you on what each letter needs to contain.
If your business is over 15 people you’ll also need to seek advice regarding redundancy pay. This is also something we can advise you on.
2. Announce potential redundancies to employees
It’s important that your people are communicated to clearly about what’s happening in your workplace. A group meeting is important, explaining the reasons for the decision and advice on potential redeployment in the business, followed up by individual meetings with employees facing redundancy.
3. Provide employees with an appropriate final letter
This letter needs to set out the employee’s final pay and notice period, or in the case of redeployment, a letter that states and sets out the terms of new employment offer.
Ensure the final pay complies with any obligations you have under the National Employment Standards (NES), the Modern Award(s) or Enterprise Bargaining Agreement (EBA) that relates to your business and any obligations you have as part of the termination. We also recommend you talk to your bookkeeper or accountant in respect to ensuring the correct tax is taken out of the final amount paid.
If this all seems to hard, if you are unclear on the steps, or afraid that you would make a mistake, give us a call on 1800 577 515, or email at firstname.lastname@example.org. Alternatively, you can book a video chat at https://calendly.com/adrian-ahr/book-a-15-minute-chat