Employment & Safety Update – 24 March 2021

The End is Near: What to expect post-JobKeeper

JobKeeper wage subsidy payments will end on 28 March 2021, with the Federal Government’s COVID-19 assistance to become more targeted into the future.

Here are the key things to know if jobs that have been dependent on receipt of JobKeeper will become redundant in the near future.

What is redundancy? 

The JobKeeper scheme did not change the fundamental rules that apply when redundancy occurs.

Redundancy happens when:

  • an employer doesn’t need an employee’s job to be done by anyone; or
  • the business becomes insolvent or bankrupt.

It is the job that is redundant, not the person.

When a person’s employment is terminated because of redundancy, they:

  • are entitled to notice (or pay in lieu of notice);
  • may be entitled to redundancy pay, in an amount depending on their length of service. In some cases, employers can apply to the Fair Work Commission to reduce the amount of redundancy pay (including to $0); and
  • must be consulted about the redundancy before they are terminated.

What is a “genuine redundancy” and why is it important?

In cases of “genuine redundancy”, employers are protected from claims for unfair dismissal. There are three key elements to establish a “genuine redundancy”. These are not displaced just because JobKeeper is ending:

1 – The employer must be able to demonstrate that the person’s job does not need to be performed by anyone because of changes in the operational requirements of the employer’s enterprise

Due to the effects of COVID-19 on certain industries such as tourism and hospitality, in many cases this element should be easily established.

2 – The employer must comply with any consultation provision in an applicable Award or Enterprise Agreement

Compliance with the consultation provisions of the relevant Award or Enterprise Agreement is an essential element of a “genuine redundancy”. The Fair Work Commission regularly reminds us that there must be strict and genuine compliance with such requirements.

Despite this, this is the step employers most commonly get wrong.

An effective consultation process would normally involve the following steps:

  1. Notify employees as soon as practicable once a definite decision has been made to implement redundancies, and inform employees in writing about the decision.
  2. Explain the effects of the redundancy and provide a genuine forum to listen to the employees’ concerns. This forum will obviously depend on the size of your organisation and the number of proposed redundancies.
  3. Give genuine consideration to any matters raised in response by the employee. This does not mean that you are required to agree with employee suggestions, but they must be genuinely considered.

3 – The employer must consider whether there are reasonable opportunities for redeployment within the employer’s enterprise or an associated entity

The employer must consider available roles within the business, or any associated entities, and whether the employee can be reasonably redeployed into another role.

This obligation requires an employer to look at the employee’s qualifications and skills and compare these to available roles.

If there are reasonable roles available, then they should be offered to the employee or made available via a procedurally fair selection process.

Conclusion

Each scenario has unique issues to consider. A tailored and methodical approach is critical to avoiding claims against your business.

If you have any queries about the process for redundancies, or the end of JobKeeper, please contact:

Joe Mullavey
Principal
M: 0416 794 061
E: jmullavey@pageseager.com.au

Caleb Devine
Lawyer
T: (03) 6235 5125
E: cdevine@pageseager.com.au

Published: 24 March 2021

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