Money
Issue No. 14 - December/January 2004
Redundancy and the Cost of Saving Money
by Michael Hegarty
It is often said that the only certainties in life are death and taxes. Certainly today, few things remain constant. To the traditional certainties we must add a third—change itself. In the world today, change is a constant. No sooner do we work out where we are going than we must consider again what we are doing and change to meet the new situation.
When we are running a business we must be prepared for change. We must accept its inevitability and work with it.
When deciding to reduce staff levels we have a number of options. We may introduce shorter working hours or change employment conditions to permanent part time or casual employment. We can hope natural attrition will lead to an appropriate reduction, but more than likely we will have to look to redundancy.
When embarking on a program of redundancies it is important to treat employees fairly. Failure to do so may cause problems within the workplace and may give rise to a successful claim for unfair dismissal.
A recent interstate case provides a textbook study of how not to conduct a redundancy process.
The employee concerned was a secretary to a partner of the firm. She had worked with him for many years. Prior to her going on annual leave in December 2002, the partner informed her that the company was to be reorganised but she was assured her position was secure. At 5 pm on the 30 January 2003, not long after her return to work, she was informed that she was to be made redundant. She was not even able to say farewell to other employees.
The employer conceded that the employee had not been consulted or given any notice of her redundancy. There was no discussion of alternative employment or any other options such as working part time or retraining and redeployment. No call for voluntary redundancy had been made.
Other employees were also made redundant at the same time. None of them were informed of their impending redundancy. An atmosphere of ...
