Redeployment And Redundancy: Australian Employer Guide

Making roles redundant is one of the toughest decisions you’ll make as an employer. You want to do the right thing by your people while protecting the business and staying compliant with the Fair Work framework.

The good news is that with a clear process, careful consultation and proper documentation, you can manage redeployment and redundancy lawfully and respectfully.

In this guide, we’ll break down what counts as a genuine redundancy, when you must consider redeployment, the steps to consult and select fairly, and exactly what to pay when employment ends. We’ll also cover the key documents you’ll need and common pitfalls to avoid.

What Do “Redeployment” And “Redundancy” Mean?

Redundancy happens when a role is no longer required to be performed by anyone due to operational changes - for example, restructuring, automation, cost-cutting, closure of a site, or merging teams.

It is about the job, not the person. Performance or conduct issues should be handled through a disciplinary process, not redundancy.

Redeployment is your obligation to look for and offer a suitable alternative role, within your business or an associated entity, to avoid a termination. In many cases, a redundancy will only be “genuine” if you’ve genuinely explored redeployment options first.

When Is A Redundancy “Genuine” In Australia?

Under the Fair Work framework, a termination is a genuine redundancy when all three conditions below are met:

• Operational change: Your business has decided the job is no longer required by anyone.
• Consultation: You’ve followed any consultation obligations in an applicable award, enterprise agreement or contract.
• Redeployment: It wasn’t reasonable to redeploy the employee within your business or an associated entity.

If any of these steps are missing, the employee may be able to bring an unfair dismissal claim.

It’s important to check whether a modern award applies to the employee and what it requires about consultation, notice and selection. If you’re unsure which instrument covers your team, it’s worth reviewing your Modern Awards obligations before you start the process.

Do You Have To Consider Redeployment First?

In most cases, yes. Before you finalise a redundancy, you must consider whether there is a “suitable” alternative position the employee could reasonably perform.

What Counts As “Suitable”?

• Comparable duties the employee can do with their skills and experience (including with reasonable training).
• A role that is safe, lawful and not designed to set them up to fail.
• Location and hours that are reasonable (some changes may be acceptable if the employee agrees).
• Pay and seniority broadly comparable - a lower-paid role can still be suitable if the employee accepts it voluntarily.

You must look across your business and any associated entities. If you operate in a group, consider whether Transferring Employees to another entity is feasible.

How To Document Your Redeployment Search

• Identify all vacancies and soon-to-be vacancies.
• Map required skills against the employee’s capabilities.
• Offer suitable roles in writing with clear details (duties, pay, location, start date).
• Record the employee’s response and any reasons if a role is declined.

Genuine efforts (and evidence of them) matter. This is often a key issue if a dismissal is later challenged.

Consultation, Selection And A Fair Process

Even if you’re confident the role won’t continue, you still need to consult properly and select fairly. A typical process includes:

1) Prepare Your Business Case

Set out why the role is no longer required, the structure after the change, and who’s impacted. Keep it factual and tied to operational needs.

2) Check Industrial Instruments

Confirm what award or enterprise agreement applies and what it requires for consultation. Many awards require you to provide information, invite feedback, and consider alternatives before a final decision.

3) Start Consultation

• Meet with impacted employees (or their representatives).
• Explain the proposal, reasons and potential impacts.
• Invite ideas to mitigate the impact (redeployment, reduced hours, job sharing).
• Provide a genuine opportunity to respond and ask questions.

Keep notes of meetings and follow up in writing. If you need to adjust any Changing Employment Contracts terms (like duties or location), ensure you have the legal basis to do so and obtain written agreement where required.

4) Selection Criteria (If Multiple Roles)

Where several employees perform similar roles, use objective, bias-free criteria. Consider skills, qualifications, essential experience and future business needs. Avoid criteria tied to protected attributes (e.g. age, pregnancy, union membership, illness or injury).

5) Confirm The Outcome

If, after consultation and exploring redeployment, the role remains redundant, confirm in writing with termination date, notice or Payment In Lieu of Notice, redundancy pay (if applicable) and what happens to leave and other entitlements.

What Do You Need To Pay On Redundancy?

Entitlements vary by tenure, instrument and circumstances, but typically include:

Notice (Or Payment In Lieu)

Employees are entitled to minimum notice based on their service. If you can’t have them work out the period, you can provide Payment In Lieu of Notice equal to what they would have earned.

Redundancy Pay

Most permanent employees (other than small business employees under the Fair Work Act and a few exceptions) are entitled to redundancy pay based on their continuous service. For a quick estimate, you can use a Redundancy Calculator, and if you need the methodology, see how to determine a Redundancy Payment step-by-step.

Accrued Leave

• Pay out accrued but unused annual leave (and leave loading if applicable).
• Long service leave: rules differ by state and territory; check the relevant legislation and any applicable instrument.

Other Payments

• Any contractual entitlements (e.g. bonuses earned, commissions owed).
• Superannuation: generally not payable on redundancy pay itself, but check the nature of each component and your instrument.

Be mindful of timing. Final pay is often due on the last day or the next usual payday (check your award or agreement).

Alternatives To Redundancy: Reduced Hours, Role Changes And Redeployment

Before you terminate, consider whether there’s a workable alternative - and consult on it. Common options include:

• Reduced hours or days (with employee agreement) - see legal issues around Reducing Employee Hours.
• Role redesign (e.g. combining duties) where the job still exists but is changing - ensure changes align with the contract and any award.
• Temporary variation to location or shifts with agreement.
• Redeployment to a vacant role in your business or an associated entity.
• Mutual separation on agreed terms via an Employee Separation Agreement (appropriate in some circumstances).

Where changes impact core terms, get informed consent and document the variation. If alternatives aren’t available or reasonable, you can proceed with redundancy following the proper process.

Essential Documents To Manage Redeployment And Redundancy

Having the right contracts and templates makes a difficult process clearer and lowers your legal risk. Consider putting these in place:

• Employment Contract: Clear terms on duties, location, hours, notice, and any flexibility clauses help you consult and vary arrangements lawfully.
• Redundancy letters: Proposal, consultation invitation, outcome and termination letters to ensure you communicate consistently and cover legal essentials.
• Selection matrix: Objective criteria and scoring framework to support fair, evidence-based decisions.
• Consultation checklist: Steps required by your award or agreement to demonstrate genuine consultation.
• Termination document suite: Scripts, checklists and settlement templates - many employers use a tailored Employee Termination Documents Suite to keep everything aligned.
• Policy updates: If you adjust restructuring or change management policies, ensure they match your legal obligations and practice.

If you’re uncertain about thresholds, exclusions, or how your awards interact with contractual terms, a quick chat about Redundancy Advice can save costly missteps later.

Common Pitfalls (And How To Avoid Them)

Skipping Consultation

Even where the outcome seems inevitable, awards often mandate genuine consultation. Share information early, invite feedback, and consider alternatives in good faith.

Not Exploring Redeployment

Failing to look for suitable roles (including in associated entities) risks an unfair dismissal claim. Document your search and offers.

Selecting On Unlawful Grounds

Don’t use criteria tied to protected attributes or take adverse action because an employee exercised a workplace right. Apply neutral, job-related criteria only.

Changing Contracts Without Consent

Unilateral changes to key terms can breach contract. Use your flexibility terms appropriately or seek written agreement when Changing Employment Contracts.

Misunderstanding Entitlements

Redundancy pay exclusions, small business rules, and service calculations can be tricky. Cross-check with your instrument and confirm your Redundancy Payment before issuing final amounts.

Key Takeaways

• A redundancy is only genuine if the role is no longer required, you’ve consulted as required, and redeployment wasn’t reasonable.
• Always explore redeployment across your business and associated entities and document your efforts.
• Follow a fair, transparent process: prepare a business case, consult under the applicable award or agreement, and apply objective selection criteria.
• Pay the correct entitlements - notice (or Payment In Lieu of Notice), redundancy pay where applicable, and accrued leave - and confirm in writing.
• Consider alternatives like reduced hours, role redesign or a documented Employee Separation Agreement where appropriate.
• Put the right documents in place - an up-to-date Employment Contract, consultation templates and a termination suite - to manage risk and stay compliant.

If you’d like a consultation on redeployment and redundancy for your Australian workplace, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.