Redundancy — consultation/notification requirements

Q&A

Redundancy — consultation/notification requirements

Consultation and notification to the relevant government agency are two issues associated with redundancies that should be addressed as required by legislation and awards.

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Consultation and notification to the relevant government agency are two issues associated with redundancies that should be addressed as required by legislation and awards.
 
An inquiry to WorkplaceInfo raised these issues.
 
Because of the impact of the economic downturn on our business we will be making a number of employees redundant.
 
We noted a recent newspaper article that referred to the current arrangements with respect to consultation with employees when a definite decision has been made by the employer to make employees redundant.
 
As we are making these employees redundant prior to the introduction of the Fair Work Act, what are the current legal requirements in this circumstance and what will be the employer’s obligations in this circumstance after 1 July 2009?
 
Currently, this will depend on the number of employees the employer is making redundant. Section 660 of the Workplace Relations Act requires an employer to notify the CES (now Centrelink) if 15 or more employees are being terminated for reasons of economic, technological, structural or similar nature, or similar reasons.
 
The written notice to the CES must set out the reasons for the termination; the number and categories of employees likely to be affected; and the time when, or the period over which, the employer intends to carry out the terminations.
 
Likewise, s668 of the Workplace Relations Act provides the Australian Industrial Relations Commission (AIRC) may issue orders to maintain parity where the employer does not notify the relevant trade union of which any of the employees was a member.
 
These provisions have been prescribed by the Workplace Relations Act for a number of years and the incidence of prosecution for non-compliance with these provisions appears small.
 
Industrial instruments
 
An employer should also check the applicable industrial instrument to determine the relevant obligations in this respect. For example, the NSW Clerical and Administrative Employees (State) Award NAPSA requires an employer to notify Centrelink as soon as possible, with an additional obligation on an employer to provide an employee with an 'Employment Separation Certificate', when requested by an employee.
 
Under the new Fair Work Act, the requirement of an employer to notify the Commonwealth Services Delivery Agency (Centrelink) where 15 or more employees are being dismissed for economic or structural reasons and the ability of Fair Work Australia to make orders where failure to notify or consult registered employee associations remains (ss530 and 531).
 
A modern award may also impose a consultation process on an employer when redundancies occur.
 
For example, cl 9 of the Manufacturing and Associated Industries and Occupations Award 2010 (operative from 1 January 2010) will require that when a definite decision has been made by an employer to introduce major change, including termination of employment (redundancy), the employer must discuss with employees affected and their representatives the effects such changes are likely to have and measures to avert or mitigate the adverse effects of such changes.
 

Source: Paul Munro, IR Consultant.

 
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