What Is The Difference Between Redundancy And Termination?

Making an employee redundant is a reason for terminating a staff member’s employment and has very specific criteria that must be met to satisfy ‘redundancy’. There are other reasons for termination or dismissal which include poor conduct or performance.

Depending on the reasons for ending employment, the processes to carry terminating employment out are quite different.

To legally make a staff member redundant, it must be because the workplace no longer needs that particular job to be worked, or the workplace becomes insolvent.

Typically a redundancy occurs when there are changes to a workplace’s operational requirements. For instance a business has lower sales in a particular area, shuts down certain projects, restructures or reorganises, or has technological advances where the job can be accomplished without the employee.

An employer cannot after making a staff member redundant then advertise their job again, as this shows the job stills needs to be carried out. To be a genuine redundancy, the employer also needs to follow award or registered agreement consultation requirements.

Lastly to be a genuine redundancy the employer must have not reasonably been able to give the staff member other work either in the same business or with an associated entity.

Termination that is not because of redundancy covers both when an employee resigns or is fired. An employee may be dismissed for poor performance or conduct. To dismiss an employee, the employee must be given a warning and a chance to rectify their performance.

In both cases of redundancy or other reasons for termination, notice must be given to the staff member. The notice may vary depending on how long the employee has worked with the organisation. If the employee has committed serious misconduct, for instance committed a crime, notice does not have to be given, though entitlements still need to be paid. If you are operating a small business, you will have to follow a code to terminate employees correctly. 

We’ve written more about redundancy here and termination here.