The Coronavirus has sent shockwaves through the Australian economy with many large employers taking steps to stand down employees on no pay for a temporary indefinite period or bring employment to an end completely on account of redundancy.
Many employers understandably see the termination of some employees as imperative and urgent at the current time in order to try to preserve the ongoing viability of the business. And our unfair dismissal regime does recognise “genuine redundancy” as a defence to an unfair dismissal claim.
However there are still procedural steps which need to be followed so as to ensure that the employees affected are treated in a dignified manner and that the employer is complying with the requirements of the Fair Work Act.
Even though it may be patently clear that an employee’s position cannot be retained, an employer may be exposed to an unfair dismissal claim if they do not follow the correct process.
Apart from the potential legal liability, the filing of an unfair dismissal claim will create just another issue the employer will need to manage in the already challenging environment. And because such claims have to be filed within 21 days of the termination any such claims would be received swiftly and at a time when the employer is still grappling with a range of other matters arising from the pandemic.
The general position is that only employees with at least 12 months service and who work for an employer with more than fifteen employees are eligible for redundancy pay.
However the fifteen employee test is complicated by the fact that employees employed by “associated entities” of the employer or the owner of the employer are also included. The “associated entities” test draws on definitions from the Corporations Act and is extremely complex.
Notice or payment in lieu of notice
Staff who are made redundant will also be entitled to notice or payment or lieu of notice, in addition to any redundancy pay which is payable.
How can we assist?
We can provide you with guidance on the process to be followed in making staff redundant. We can also advise on your obligations in respect of redundancy pay and payment in lieu of notice.
The Pointon Partners employment law team is here to provide rapid advice and assistance to help you navigate through this extremely challenging time.