Redundancy

Redundancy occurs when there no longer exists a need for a particular job to be done. This can be due to a variety of factors including:

• The employer becomes insolvent or bankrupt
• New technology means an employee is no longer required to perform the work
• The employer restructures due to an acquisition or merger
• The roles are relocated overseas or interstate

Redundancy can be devastating for an employee. However, redundancies are only valid if they are ‘genuine redundancies’. For a redundancy to be genuine, the circumstances need to be such that there is no need for the job to be performed anymore. An employer also has to follow the proper processes in informing the employee that their role will be terminated.

Issues that may arise

There are many legal issues which can arise when redundancies are made by an employer. This can include questions of whether a redundancy was genuine and whether the correct process was followed in consultation with the affected employees. If a redundancy is not genuine, an employee can make a claim for unfair dismissal. Further, employers are required to consult with employees under the Fair Work Act 2009 (Cth). If an employee feels that the proper process was not followed (for example, if an employer did not properly investigate redeployment opportunities for them), they can also make a claim under the Fair Work Act 2009.

What are my rights?

As an employer, you have to ensure that you follow all the consultation guidelines and calculate an employee’s redundancy pay correctly. The amount that you have to pay to an employee will depend on how long they have been employed by you and whether you’re a small business employer.

If you have been made redundant you have the right to have any leave entitlements paid out and redundancy pay (also known as severance pay) paid out to you. Further, an employer is obligated to consult with you and give you adequate notice of the redundancies that are to be made.

What is a redundancy lawyer?

A redundancy lawyer deals with matters relating to the dismissal of an employee through redundancy and operates with expertise in employment law.
Employment law is predominantly governed by the Fair Work Act 2009 (Cth) and the Fair Work Commission (FWC) deals with applications for unfair dismissal. They will act on behalf of both employees and businesses to either claim an unfair dismissal against their client or defend proceedings from a dismissed employee.

Possible outcomes of a successful claim for unfair dismissal include compensation, a reference from the employer and reinstatement (although this is not a common outcome).

Why do I need a Redundancy Lawyer?

If an action has been taken against you as an employer, it will be important to gain the advice of a redundancy lawyer. If you are an employee and think you have been unfairly dismissed it is best to get in touch with a lawyer. In Australia, there is a limitation of 21 days to make a claim against your employer through Fair Work Australia. Grounds for unfair dismissal range from discrimination, unjust or unreasonable reasons through to whether or not redundancy was not genuine. For this reason, a redundancy lawyer will be your best method of finding your strongest claims.

What will a Redundancy Lawyer provide?

Redundancy lawyers will use their extensive knowledge to determine whether a claim or defence is valid. They will inform you of the appropriate step forward with the aim of resolving your matter. They are experts in employment law and will take care of any submissions required and any action that needs to be done in order to enforce your rights and interests.

How much will a Redundancy Lawyer charge?

Generally, employment and redundancy lawyers charge by the hour. In most cases, they will offer an initial consultation, this will either be a one off fee but can sometimes be free. Charges by redundancy lawyers will increase the more time they need to spend on your matter. If the matter goes to court, the price will increase depending on court costs. However, lawyers will try to avoid this.

Hourly rates and Court fees

The cost of a Redundancy Lawyer will vary based on the scope of the work. Small issues likely to be addressed quickly will cost less. For matters that will need to go court, there are additional Court fees associated with doing this, particularly as these disputes take time.

What can a Redundancy Lawyer legally charge?

Costs can rise very quickly, especially in litigation. However, this is sometimes hard to avoid when work is being done by a lawyer on an hourly basis. Where fixed-fees are not offered by the lawyer, you should expect to be invoiced on a monthly basis. Lawyers are required to adhere to the rules outlined in the relevant acts. For example, in NSW and Victoria, this is the Legal Profession Uniform Law 2014.

Lawyers are required to provide to their clients a document called a ‘costs disclosure’ if your costs will be higher than $750.00. This document will outline how costs will be calculated in relation to your case. Also be mindful that costs are divided into ‘professional costs’ and ‘disbursements’, and you will be expected to pay for both. Professional costs are the costs of the actual work done by the lawyer, whilst disbursements cover incidentals such as court filing fees, telephone calls, photocopying charges – amongst other things.

What if I don’t agree with the costs?

You have the right to request an itemised bill that will outline how much time was spent on each task in relation to your matter, and how this adds up to the fee you’re requested to pay. If you wish to dispute the cost, you can make a complaint to the The Office of the Legal Services Commissioner (OLSC) and they will investigate the matter and may allocate a costs assessor. You can also take further legal action in the Courts if you feel you have been unfairly charged.

Useful Information

• Avoiding the pitfalls of redundancy: Lessons for employers
• Steps to Make an Unfair Dismissal Claim
• What is Genuine Redundancy?
• 5 Questions to Ask a Redundancy Lawyer?