A guide to getting redundancies right for your people and your business

As companies look to the future and focus on realigning their businesses following several years of being deeply steeped in a pandemic world, many are looking at restructuring and downsizing their workforce to ensure their long-term viability. In particular, tech companies have been making headlines in 2022, although perhaps not for the reasons they would like. With their share prices rapidly declining as concerns over rising inflation scare off investors, few tech companies have escaped redundancies in the last year. This is a first for many companies that have experienced boom times for decades. Few industries will come out of the pandemic unscathed.

Some job market facts.

• Australia’s job mobility is a long way from a job for life;
  

• On average, we will have three job changes per decade that we work;
  

• The average tenure within an organisation is three years and four months;
  

• In February 2022, 2.1 million Australians left or lost a job in the last 12 months; and
  

• One in 10 of these 2.1 million Australians had their position made redundant.

What is a redundancy?

A redundancy occurs when an employer decides that a job or position is no longer required to be done by anyone. The key to redundancy is the disappearance of a job or position.

The most common reason for redundancy is when a business restructures or reorganises its operations so that a job is no longer required or is to be performed in a substantially unique way.

In this article, we address some of the requirements for redundancies and suggestions on how to get redundancies right the first time for your employer brand and the duty of care for the individuals involved.

Ensure it is legal

Ensuring that redundancies are conducted consistently and fairly helps reduce an employer’s risk of unfair dismissal claims. To avoid a successful unfair dismissal claim, a redundancy must be ‘genuine.’ The Fair Work Act provides that for a redundancy to be genuine, three requirements must be satisfied:

1. an employee’s position is no longer required to be performed by anyone because of changes in the business’s operational requirements.
2. the employer has complied with the consultation requirements in an applicable modern award or enterprise agreement; AND
3. it was not reasonable, in the circumstances, to give the employee another job within the business or an associated entity.

A helpful guide to redundancy consultation

1. Fair Work Ombudsman guide

The notification process

Notifying an employee that their role is redundant is quite possibly one of the most challenging workplace conversations. Chances are, you have experienced one or more redundancies yourself and remember the complex range of emotions at that moment and the transition experience that followed. 

For the employee, it has the potential to rock their world, expected or unexpected — it can be a big blow and have a tremendous impact on their well-being and the wellbeing of those close to them.  

The impacts are high for employees who are responsible for facilitating the notification process. It’s an important conversation, one that opens up the potential for risk that needs to be mitigated. Support, training and preparedness are essential. 

The remaining employees are also impacted by the loss, the change, the new way, their new team structure and responsibilities. Change strategy, leadership and employee experience are essential.

Pre-notification phase

Preparing for the notification phase is critical in mitigating risk for all involved. There are several vital steps pre-notification for those involved in leading the process internally. Ensure all involved:

• Are clear on the rationale for the restructure — leveraging a core, consistent message;
• Understand what the impact will be on individual roles, teams and the organisational strategy;
• Consider each individual’s unique circumstance and identify employees at risk;
• Are across the logistics, timelines and stages;
• Fully prepare the notification communication and clear this with HR and legal advisors;
• Have a chance to rehearse the core messaging and are prepared for potential reactions;
• Are prepared for the possible emotional reactions of people and know how to expertly respond, mitigate risk and stay on task with notification;
• Know what career transition support is being offered to the impacted employees and how to position the value of the career transition experience; and
• Have a plan in place in case of mental health risk: EAP support and onsite support.

The notification phase

There is a structure that needs to be consistently applied to the notification of a redundancy meeting. Notably, the notification meeting communicates the redundancy clearly, concisely and with empathy. Core messaging is essential, as is the manager’s ability to stay on track and appropriately respond to the employee’s emotional reaction. 

First and foremost, it is imperative to ensure that notification meetings are conducted in a safe (private and confidential) space and ideally in person. If they must be done remotely, you have a duty of care to ensure the well-being of the impacted individual. Ensure you flag any risk, alert, and engage an EAP if needed. 

Whenever possible, partner the employee’s manager with HR during the meeting.  

Six steps to an optimal INDIVIDUAL notification meeting.

1. Communicate the decision clearly and concisely.
2. Advise the rationale for the decision.
3. Practice active listening with compassion, responding appropriately to the employees’ emotional responses and responding to questions as appropriate.
4. Have all notification communication available, including the separation package and details of the EAP. 
5. Explain the terms of the separation arrangement and the next steps in the process, including who the person can contact in HR for information.
6. Ensure that the employee is clear on what post-career transition support will be provided, e.g., details of the career transition program and next steps.

Some Do’s and Don’ts to get it right

Do’s:

• Think about the optimal date and time for the notification meeting. This will vary depending on individual circumstances;
• Anticipate and prepare for different behavioural reactions. Have EAPs set up and details in the notification kit;
• Provide on-site support with a career transition consultant to assist with an objective well-being check and, if they are being provided with a career transition program, an opportunity to show how the individual will be supported moving forward; and
• Think about the remaining staff and how you will respond to their questions and handle any reactions.

Don’ts:

• Allow the meeting to dwell on a discussion of performance or discuss issues from the past; 
• Try to diminish the employees’ concerns about the future. They usually cannot see the brighter side of anything at this point;
• Engage in criticising the company. Listen and acknowledge the employee’s view if the employee brings it up. Do not agree or disagree; and
• Get defensive or argumentative with the impacted employee. Remember, this can be a time of heightened emotions.

Partner with your Career Transition Provider every step of the way

Employees who are supported by a Career Transition Program are more likely to:

• Transition faster to a job they love;
• Foster strong wellbeing during their time of transition and a new beginning;
• Move through the emotional impacts of redundancy faster; and
• Be brand ambassadors of your organisation. 

Managers who are supported in delivering the notification process by a Career Transition provider are more likely to:

• Maintain their wellbeing during the complex and stressful responsibility of leading change and delivering notification of redundancy meetings;
• Collectively deliver a clear, consistent, concise experience, balanced with empathy and compassion;
• Mitigate employee well-being risks; and
• Be brand ambassadors of your organisation.

Look for a Career Transition provider that offers a blend of individual, group and digital experiences, that provides employees with choice and not a one-size fits all solutions. 

Even after many happy years with a company, employees will remember the exit experience most, which can impact your employer brand going forward. 

Ask yourself whether they were treated with respect was, the process fair and transparent, and employees were effectively supported with their transition to a new role. If your existing employees answered yes to these questions, you have got your redundancy right.