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Redundancy

Redundancy is defined at common law as a situation where an employee's position becomes surplus to the needs of the employer. A redundancy is treated by the Courts as a dismissal, therefore it must be genuine and carried out in a procedurally fair way.

How a redundancy is managed is subject to the statutory Test of Justification, section 103A, that is what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occured.

  • There must be a genuine redundancy situation.
  • The procedure used to select employees for redundancy must be fair.
  • All effected employees should be included in the process and the use of selection criteria consulted on.
  • The employer must provide access to information for the employee to comment on before a decision is made.
  • The employer must explore and exhaust all redeployment options for the employee before termination.
  • Entitlement to redundancy compensation is dependent on the terms of the employment agreement.

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