End-of-employment crossroads: Why redundancy may not be the best answer

Danny King

The following should not be considered legal advice and is for general use only.

Workplace relationships can be complex and dynamic. They change naturally over time as perspectives and people’s circumstances evolve. They can also be emotionally charged, and whether you are an employer or an employee, this is often particularly evident when navigating end-of-employment.
However, as humans, we’ve been hard-wired to fear this transition. It tends to invoke feelings of panic and vulnerability for all parties. That’s ok. But when viewed through this prism, it’s not surprising that situations escalate, become acrimonious and poor decisions are made in the heat of the moment.
It is at these critical junctures that we tend to be approached by clients seeking support. But it’s worth remembering something crucial – almost all employer-employee relationships do eventually come to an end. Recognising this as a natural part of the relationship is a good starting point to change how we approach this sensitive period.

Being honest about the root cause
At the same time, while there are countless reasons employment ends, and many instances are amicable and professional, this isn’t always the case. Heightened emotions mean employers must manage these situations delicately, professionally, and in a way that preserves the organisation’s overall culture.
This can be especially challenging when an employee’s tenure, but not their role, is in question and performance or behavioural issues need to be addressed.
All too often, we see employers turn to redundancy, perceiving it to be a softer alternative to confronting underperformance or conduct issues. The prevailing ‘wisdom’ is it avoids hurt feelings and attributes blame to other externalities, avoiding the need to talk about hard things. In reality, this sequence of events might ignore the root cause of the issue at hand and, in doing so, can present legal risks.
The questions worth asking here are: will brave conversations with employees and setting clearer boundaries around performance and expectations be a better alternative? Would opening up a conversation about mutually agreeable separation avoid the issue before it deteriorates? How does culture suffer if problems are avoided, and not addressed?

Navigating the risks
From a legal perspective, it’s crucial to understand the subtleties of the situation. In particular, whether an end-of-employment decision results from the actions of the employee or, entirely separately, a business-level decision about the future of the role.
There are certainly circumstances where there is a legitimate choice between addressing performance and conduct and making a role redundant.
However, determining the correct course of action isn’t always clear-cut, and taking the wrong path could open your business up to the risk of litigation.
This is especially true if an employer considers using redundancy as a trojan horse for a dismissal that’s really related to performance and conduct. To mitigate such risks and understand the consequences of a particular action, it’s essential that employers seek professional legal advice before committing to a path they can’t easily deviate from.

How DKL can help
There are many factors to consider when it comes to managing tricky workplace relationships, especially if you are considering redundancy or termination of employment.
Depending on the details and nature of a dismissal, an employee may have grounds to make a claim under the ‘General Protections’ or ‘Unfair Dismissal’ provisions of the Fair Work Act 2009.
DKL can provide employers with advice to help understand their obligations, assist in organisational restructures and redundancies, write appropriate and effective contracts and policies, and help make decisions and deploy procedures to mitigate risk.
It’s never too late to get help, regardless of where you are in the decision-making process, so if you’re facing these employment issues and unsure of your obligations and available pathways, please get in touch.

The above should not be considered legal advice and is for general use only.