We’ve all been in situations where we had to share unpleasant news with someone. So, we are all well aware that it’s challenging for both the person delivering the message and the one receiving it.

And if you’re a business owner or an HR manager, you’re likely very familiar with this task and feeling ― especially when managing the redundancy process. In that case, a single misstep can harm your company’s reputation or lead to unfair dismissal claims.

Therefore, it’s vital to approach the redundancy process attentively, ensuring your employees’ fair treatment while safeguarding your company’s interests.

Here are key points from an HR expert’s perspective to help you efficiently manage the redundancy process.

Establishing a redundancy process plan

First and foremost, you need a redundancy process plan. Like many other business tasks, redundancies are more likely to be as positive as possible when carefully planned.

Start by verifying that you are indeed dealing with a genuine redundancy. See our redundancy guide to understand the definition of genuine redundancy and ensure it aligns with your current circumstances.

Once you’ve confirmed the legal aspects, assemble a team of managers to create a comprehensive implementation plan. Outline precise details: state the number of affected individuals, establish realistic consultation timelines, and address logistical considerations, such as the availability of meeting rooms.

Moreover, it’s crucial that when you announce potential redundancies, you are well-prepared and informed. To achieve this, ensure you can provide clear answers to the following questions:

Determining roles for redundancy

In situations where a business is closing down, it usually means that all employees will be facing redundancy, and there won’t be a need for selection among them. The same applies if the redundancy process is due to eliminating roles you no longer need.

However, if you conduct redundancies for financial reasons, you’ll need to determine which roles can be eliminated while ensuring the business can operate effectively. This means you’ll need to pinpoint the specific functions at risk of redundancy and make selections from within that group.

Evaluate factors such as:

  • Financial consideration: Identify roles for elimination that can result in substantial cost savings for the company.
  • Alignment with company goals: Evaluate all roles based on alignment with the organization’s long-term vision and shortlist those that contribute the least.

Conducting redundancy consultations

The Fair Work Act 2009 (the Act) mandates that employees covered by awards and registered agreements must undergo a consultation process in the case of major changes in the workplace, including redundancies. However, drawing from years of experience in HR, I strongly advise conducting redundancy consultation even if no award or enterprise agreement is in place.

Job loss is one of the biggest stressors in anyone’s life, which is why redundancy consultations are not only a legal requirement but also a sound ethical practice. Consultation provides space and time for honest discussion with affected employees, conveying a sense of care and demonstrating your company’s commitment to employees’ well-being.

Here are some of the key topics you should be ready to address during the redundancy consultation:

  • The reason behind the company’s decision to make the position redundant.
  • Efforts or steps that are taken to prevent the need for redundancy.
  • Redundancy alternatives suggested by affected employees.

Download the complete redundancy consultation checklist.

Announcing redundancies

This is a critical aspect that many companies often overlook when managing redundancy processes ― it’s essential to handle redundancy announcements with care. For instance, until consultations are finalized, all documentation should use terminology like “proposed redundancy”. Additionally, it’s crucial to emphasize that the role is being made redundant, not the individual. These practices help ensure clear and respectful communication before and during the announcement of redundancies.

Once consultations have been conducted and redundancies are confirmed, it’s essential to make the announcement simultaneously to all employees to ensure a consistent message. However, it’s also a good practice to inform managers (or directly affected employees if no managers are involved) about the announcement content in advance, in a private setting, to address any questions or concerns they may have.

Supporting departing and remaining employees

It’s crucial to develop strategies for supporting both departing and remaining employees during the redundancy process.

Namely, often, managers focus on employees who are leaving, inadvertently neglecting those who remain. However, the remaining employees, although not directly affected, may still experience concerns and stress, including worries about job security and sadness regarding departing colleagues. To address this, it’s essential to maintain open communication and ensure that managers regularly engage with staff to provide support and reassurance.

When addressing departing employees, you can create strategies to support their emotional well-being and job search. This assistance can involve open discussions about their emotions, thoughts, and plans, assisting with CV preparation, providing interview practice sessions, granting access to company computers for job applications, etc.

Managing redundancy with expert HR assistance

Redundancies can be a necessary step for a company to stay operational. If your business finds itself in this situation, the good news is ― you don’t have to navigate it on your own.

Fresh HR Insights is here to assist you in efficiently managing this process.

Our HR and employment experts have extensive experience planning and managing redundancy processes. And we have compiled this wealth of knowledge into a handy manual on effective redundancy implementation in Australia.

The information and guidelines within the manual can assist you in effectively managing the redundancy process, safeguarding the well-being of employees and securing your company’s future.

Download your manual here.