The business is booming, making money, and life is good. But, suddenly, things take a turn for the worse and you are forced to let staff go to make ends meet. Many of our members have been fortunate enough to avoid dealing with redundancy, but when a time does arise where an employee or group of employees must be made redundant, it can be really difficult for business owners to navigate the complex requirements.
A
redundancy is genuine if you no longer require anyone to perform a role
which an employee currently holds. This can occur due to operational
requirements of the business such as: restructure; downsizing;
outsourcing; or, the closing down or sale of the business.
I need to reduce my team of five sales employees to three as a result of economic downturn affecting the business. What rules are there to follow when choosing who will remain employed and who will become redundant?
There are a few ways to select which employees will be made redundant during a downsizing process. The most fair and reasonable way to select which employees will be made redundant is through a skills matrix. When selecting employees, it is important to link your decisions with the operational requirements of the business. The selection criteria should be objective, non-discriminatory, and consistently and fairly applied.
Best practice would be to map all of the affected employees on a matrix, against a series of selection criteria to clearly see which employees best suit the requirements of the business moving forward. Examples of possible selection criteria to use in your skills matrix would be:
Do I always have to offer a redundant employee another role within my business?
No. You only need to redeploy an employee if it is reasonable to do so. If you do not have a suitable position for the employee, that is okay. For redeployment to be reasonable:
https://www.cciq.com.au/advocacy/blog/the-rules-of-redundancy?mkt_tok=3RkMMJWWfF9wsRolu67KZKXonjHpfsX67%2BgvWbHr08Yy0EZ5VunJEUWy3IYAStQ%2FcOedCQkZHblFnVgMQ62%2FWLkNracF
I need to reduce my team of five sales employees to three as a result of economic downturn affecting the business. What rules are there to follow when choosing who will remain employed and who will become redundant?
There are a few ways to select which employees will be made redundant during a downsizing process. The most fair and reasonable way to select which employees will be made redundant is through a skills matrix. When selecting employees, it is important to link your decisions with the operational requirements of the business. The selection criteria should be objective, non-discriminatory, and consistently and fairly applied.
Best practice would be to map all of the affected employees on a matrix, against a series of selection criteria to clearly see which employees best suit the requirements of the business moving forward. Examples of possible selection criteria to use in your skills matrix would be:
- Required skills: relevant experience, training, qualifications
- Productivity levels (using objective, quantifiable records): sales data, daily production rates
- Performance-based (be careful as this can get subjective; it is important that performance based selection is still closely linked to skills and productivity)
Do I always have to offer a redundant employee another role within my business?
No. You only need to redeploy an employee if it is reasonable to do so. If you do not have a suitable position for the employee, that is okay. For redeployment to be reasonable:
- The employee must have the skills and competencies...
https://www.cciq.com.au/advocacy/blog/the-rules-of-redundancy?mkt_tok=3RkMMJWWfF9wsRolu67KZKXonjHpfsX67%2BgvWbHr08Yy0EZ5VunJEUWy3IYAStQ%2FcOedCQkZHblFnVgMQ62%2FWLkNracF
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