Thinking about redundancy? Read this first

Redundancy is one of the most challenging decisions an employer can make. It’s not just a legal process - it’s a human one. Whether driven by structural change, economic pressure, or operational shifts, redundancy requires careful planning, clear communication, and a genuine commitment to doing things properly. 

This blog outlines key considerations for employers before initiating a redundancy process, with links to practical tools and checklists that can help you navigate each step with confidence. 

What to do first 

Before you begin drafting letters or scheduling meetings, take a moment to step back and assess the situation clearly. A well-managed redundancy process starts with clarity and preparation. 

Ask yourself: 

• Is this a genuine redundancy? 

• What is the business reason for this change? 

• Which roles (not individuals) are affected? 

• Have all reasonable alternatives been considered? 

• Are there opportunities for redeployment? 

Once you’ve answered these questions, begin documenting your rationale and reviewing your consultation obligations. This early groundwork will help ensure the process is fair, compliant, and respectful. 

Helpful resource: Australian Industry Group’s Redundancy Toolkit includes a helpful overview of what constitutes a ‘genuine redundancy’ under the Fair Work Act 2009.

1. Understand what redundancy really means

Redundancy occurs when a role is no longer required due to changes in the business, not because of performance or conduct. It’s the position that becomes redundant, not the person. This distinction is critical, especially when it comes to legal compliance and employee communication. 

Before proceeding, employers should be clear on: 

• The operational reason for the change 

• Whether the role is genuinely no longer required 

• Whether redeployment options have been explored.

2. Plan before you act

Redundancy is not a single event - it’s a process. Planning ahead can help reduce risk, support employee wellbeing, and ensure compliance with consultation obligations. 

Key planning steps include: 

• Developing a clear and genuine business case 

• Identifying affected roles (not people) and using robust selection criteria when choosing an employee/s for redundancy from a pool of employees who all perform the same or similar roles 

• Mapping out timelines and developiong a communication plan 

• Preparing documentation and scripts. 

Helpful resource: The redundancy business case checklist and redundancy communication plan will help employers to structure the right approach. 

3. Consultation is not optional

If your business is covered by a modern award or enterprise agreement, consultation is a legal requirement. Even where it’s not mandated, it’s still extremely important. Members are encouraged to seek advice from Australian Industry Group about the consultation obligations that apply to their organisation. 

Consultation involves: 

• Notifying affected employees of the proposed change; 

• Discussing any redeployment opportunities;  

• Providing relevant information in writing; 

• Giving employees a chance to respond and suggest alternatives; and 

• Genuinely considering their feedback. 

Helpful resource: Employers are encouraged to use our redundancy consultation checklist to ensure employer obligations are met.   

4. Prepare for the conversation

Redundancy conversations are difficult - for everyone involved. Being prepared, empathetic, and clear can make a significant difference in how the message is received. 

Some practical tips: 

• Choose a private, quiet space 

• Offer the option of a support person 

• Use a script to stay on track, but speak with empathy 

• Allow time for questions and emotional responses. 

Helpful resource: Australian Industry Group’s ‘Having the redundancy conversation’, ‘Redundancy conversation: First Meeting Script’ and ‘Redundancy conversation: Notice of Termination Final Meeting Script’ offer practical support for these conversations. 

5. Avoid common pitfalls

Even well-intentioned employers can make mistakes during redundancy processes. Some of the most common include: 

• Not documenting the rationale clearly; 

• Failing to consult properly; 

• Using subjective or inconsistent selection criteria 

• Treating the employee like they’ve done something wrong. 

Helpful resource: Australian Industry Group’s redundancy article outlines how to avoid these traps and support employees with dignity and respect. 

Moving forward with confidence 

Redundancy is never easy - but it can be managed well. When done thoughtfully, it can help organisations adapt to change while maintaining trust and respect with their people. 

The key is to approach the process with care: plan thoroughly, communicate clearly, and support those affected. It’s not just about compliance - it’s about doing the right thing for your employees and your business. 

Further information  

If you’re considering a redundancy process, our HR Resource Centre has a dedicated section on redundancy includes a full suite of tools, templates, and guidance to support you at every stage - from planning to consultation to final meetings. Members of Australian Industry Group can also contact our Workplace Advice Line at 1300 55 66 77 for tailored support.