Offering voluntary redundancy .pdf
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Offering voluntary redundancy
Despite this exclusion from the federal unfair dismissal regime, choosing fair
selection criteria will still be an important consideration for employers when
implementing redundancies for three reasons:
1. Best practice: implementing redundancies can have serious detrimental effects
on both productivity and morale. Adopting a procedurally fair process may assist
in minimising some of these side effects in the organisation.
2. Not a genuitk redundancy potential for unfair dismissal claim: in some
cases, FWA may find that the genuine redundancy exclusion does not apply,
for example, because the employee could reasonably have been redeployed in
the organisation. In such cases, the selection criteria adopted by the employer
are likely to come under scrutiny in a determination of the fairness of the
3. Other legal rights: even if an employee is prevented from bringing an
unfair dismissal action, he or she may have other legal actions such as a
general protections or discrimination claim a breach of contract claim, or a
breach of award/enterprise agreement claim. Using fair selection criteria may
limit the exposure presented by these alternative legal avenues.
Offering voluntary redundancy
A voluntary redundancy program allows employees to volunteer to leave the
organisation, usually in exchange for a generous severance package provided
employer. Voluntary redundancy programs need to be carefully
planned, for example:
• the number of employees who are allowed to take advantage of the
program should be controlled by management
• the program should be for a fixed period of time, during which eligible
employees may accept or decline the offer
• potential discrimination (either direct or indirect) in determining
those employees who are eligible must be avoided (for example,
excluding employees who are on parental leave is discriminatory), and
• the business needs of the organisation must not be compromised
management must retain the right to staff key areas appropriately.
Voluntary redundancy schemes will only work if they offer generous
packages. However, if the package is too generous, management will be
forced to have to turn down applicants. This may create a morale
problem for those left behind. It is essential that management identify
in advance the areas of the organisation in which the program will
operate. This avoids raising expectations unnecessarily.
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