When a business changes direction, restructures, or looks to improve efficiency, roles can become unnecessary. In these situations, many employers move quickly to label the decision a “redundancy.” But under IR laws redundancy isn’t just a label, it’s a legal test. And if it’s not handled properly, it can expose your business to claims in the Fair Work Commission.
What is a genuine redundancy?
Under the Fair Work Act 2009, a redundancy is considered genuine if
- The role is no longer required due to operational changes
- Consultation obligations have been met (where applicable)
- Redeployment has been considered within the business or associated entities
All three elements matter. Missing just one can mean the redundancy is not considered “genuine.”
Common mistakes businesses make
We regularly see business owners run into trouble because they
- Assume removing a person = removing a role
- Continue having the same duties performed by others
- Skip or rush consultation
- Don’t properly consider alternative roles
- Lack documentation explaining the business decision
These gaps often become the focus of an unfair dismissal claim.
What the Fair Work Commission looks for
If a redundancy is challenged, the Fair Work Commission will look beyond what you’ve called it and assess
- Whether the job itself has genuinely disappeared
- Whether the business change is real and evidence-based
- Whether the process was fair and reasonable
In short, they are testing whether the redundancy is substantive, not convenient.
How to get redundancy right
To reduce risk, business owners should
- Clearly document why the role is no longer required
- Write a solid business case as part of the planning process
- Show how duties will be removed, restructured, or redistributed
- Conduct a genuine consultation process, not just a rushed exit
- Consider redeployment options, even if limited
- Give the impacted person a genuine right to respond
- Keep records of all decisions and communications
Taking these steps creates a defensible position if your decision is later challenged.
Why it matters
Getting redundancy wrong can lead to
- Unfair dismissal claims
- Reinstatement or compensation orders
- Legal costs and management time
- Reputational damage
Getting it right, on the other hand, allows you to make necessary business changes with confidence and protection. Redundancy is not simply about removing a role, it’s about being able to prove why that role no longer exists.
If you’re considering restructuring your workforce, taking the time to build a clear and compliant process upfront will save you significant risk down the track. Need help navigating redundancy or restructuring? Getting the process right early is always more effective than defending it later, get in touch today to make sure your business is protected.
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