The document discusses the complexities and legal implications involved in managing employee redundancy, emphasizing the need for careful handling to minimize stress for both managers and departing employees. It highlights the importance of clear communication, legal compliance, and ethical practices to maintain morale among remaining staff while avoiding potential claims of discrimination. Additionally, the text recommends consulting employees during redundancy processes and suggests best practices for conducting these discussions effectively.

1. Redundancy
ADP Insider
Redundancy
July 7th, 2014 - by Leon Gettler
Redundancy is a delicate area. Dismissing
and terminating someone is not easy, for the
employee or the manager. Retrenchments need
to be handled carefully. Managers not only need to
understand the sensitivities, they should also be
mindful of legal issues and, for that matter, doing
the job in an ethical way.
If you make someone redundant the right way,
people will leave your organisation sad but not
furious. And in this economic climate, it makes
it easier for people to come back when you
need them. Mess it up and you could be burning
bridges and alienating those who stay. You could
also be damaging the company’s reputation,
making it more difficult for your organisation to
hire talent in the future.
The first and most important thing is for
managers to be aware of the legalities so that
they can avoid potential unfair dismissal claims.
The Fair Work Commission makes it quite clear
who exactly is covered by the law and who isn't
(like those employed by a small business with less
than 15 employees). Business Victoria also gives
you a run down on key issues like, for example,
whether you have to consult with employees, how
much notice you need to give and final payments.
Making someone redundant also causes a lot of
stress for managers. An often-cited 1998 study
found that managers double their risk of a heart
attack after they sack someone.
So what are the ways to do it? Specialists say
there are a number of key rules that need to be
followed. First, is the initial conversation with the
employee.
This needs to be handled in a business-
like manner. It should be free of emotion.
Preparation is critical. Managers not accustomed
to doing this might need training and they
certainly need to monitor their body language,
their expression and the way they handle it.
The discussion with the employee needs to
cover such issues as the departure date and the
package. There is no law requiring employers
to provide outplacement services or financial
counselling.
However, it is advisable to at least look into this.
It is not only regarded as best practice but it will
help preserve morale for remaining staff.
"Survivor guilt" is one of the most difficult
passages for those not targeted for redundancy
and employers need to manage it carefully to
ensure staff remain productive and focused.
This is why remaining staff need to be kept
informed of developments. In small companies,
this is usually done with a meeting. Larger
companies can do it by email.
Companies also need to be aware of leaving
themselves open to claims of discrimination on
the grounds of race, sex, disability or whether the
person belongs to a union.
They also need to be mindful about potential
claims of indirect discrimination. A company,
for example, might have only started employing
women in recent years but if they then implement
a "last in, first off" policy, they could be open to
claims they are discriminating against women.
Companies also need to be very clear about their
legal obligations including the required levels of
severance pay.
Negotiating how much time one allows the
person to stay once they have been declared
redundant is a sensitive issue. This depends
on the circumstances. If the job is complex,
some companies would require the employee to
continue working for some time to complete a
handover.
If the job is less complex, and if the transition
is likely to be smoother, the employee might be
required to leave at the end of the week.
If there are security issues, the employee might
be required to leave immediately. The danger with
that, however, is that this could send out a punitive
message to remaining staff. Regardless of the
circumstances, very few people do inappropriate
things during the workout period.
But, it is also damaging to have a workout period
that is too long. A three-month stint can be
demoralising all around. Smart employers find a
middle ground.
The ADP Logo and ADP are registered trademarks of ADP, LLC. ©2015 ADP, LLC.
"From 1 January 2014, all modern
awards have been updated to
include a consultation period. This
requires employees to be consulted
when the company is planning
anything that impacts their working
conditions or hours."
Leon Gettler
Freelance Journalist

2. Redundancy
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To protect intellectual property, employees should
be required to return everything belonging to the
company, and they should sign an undertaking
that they have done so.
From 1 January 2014, all modern awards have
been updated to include a consultation period.
This requires employees to be consulted when
the company is planning anything that impacts
their working conditions or hours. Being paid a
redundancy is impacting the employee’s hours, so
they should be involved in discussions at the early
stage. Companies have had to pay compensation
when employees lodged claims with the Fair Work
Ombudsman because they didn’t consult them
about their redundancy plans.
In the end, it is important to plan what is going to
be said. It would also help having someone else
present with you when you are undertaking this
task. This could be important both from a legal
perspective and also to chip in if you forget to say
anything.
Want to find out more about Redundancy?
The Fair Work Commision - www.fwc.gov.au
Business Victoria - http://bit.ly/1KCKK2o
1998 Study - http://bit.ly/1zRCMhe
See more at: www.adppayroll.com.au/adpinsider
The ADP Logo and ADP are registered trademarks of ADP, LLC. ©2015 ADP,