Redundancy business case checklist

Redundancy means that an organisation no longer requires a specific role to be performed. This may be due to reasons such as downsizing, an organisational restructure, productivity/process improvements, or technological change.

Termination due to redundancy is exempt from unfair dismissal if the dismissal is a case of ‘genuine redundancy’. This means the organisation can demonstrate a sound business case for the redundancy of a role, it has complied with consultation obligations as set out in an agreement or an award, and that there was no other suitable alternative employment within the business or associated entities (as defined by the Corporations Act 2001). A ‘genuine redundancy’ does not prevent an employee lodging a claim for general protections under federal legislation, so it is also important that an employer can show that a decision to make positions redundant was influenced only by legitimate business reasons, and not by any prohibited reasons such as exercising a workplace right or engaging in industrial activity.

The checklist below is designed to assist organisations in cases of redundancy and, specifically, to help ensure they have a sustainable business case. Employers can use the ‘Notes’ column to record their responses to the questions. On completion, the analysis will either create a sound business case for proceeding with a redundancy (or redundancies), or will indicate that, in some or all cases, redundancy may be avoided due to actions such as redeployment, re-training for new roles, or flexible working arrangements.