You’ve made the hard decision. The role’s no longer needed. You’ve documented the reasons. You’ve calculated redundancy pay. Then the unfair dismissal claim arrives.

Nine times out of ten, the reason isn’t what you think. It’s not the redundancy decision itself. It’s the conversation—or the lack of one. The Fair Work Commission repeatedly overturns “genuine redundancy” defences because employers skip consultation. The result? A $95,050 compensation bill waiting for you.

This guide walks you through exactly what “consultation” means under Fair Work law, why it matters, and the specific steps that protect you from six-figure claims.

What the Law Requires: Consultation vs. Notice

Here’s where most employers get it wrong. Notice and consultation are not the same thing.

Notice = telling an employee they’re being made redundant, when it’s happening, and how much they’re getting paid.

Consultation = a genuine discussion with the employee about the redundancy before the decision is final—or at minimum, before dismissal happens.

The Fair Work Act 2009 doesn’t mandate consultation on every redundancy. But if a modern award or enterprise agreement applies to the employee, that agreement almost certainly does.

Check your applicable modern award now. Awards in healthcare, construction, transport, retail, hospitality, and professional services all require consultation. If your employee is covered by one, consultation isn’t optional. It’s mandatory.

Failing to consult = the redundancy is not “genuine” = automatic unfair dismissal liability.

The Three-Part Genuine Redundancy Test

Under section 389 of the Fair Work Act, a dismissal is only a genuine redundancy if ALL three conditions are met:

1. The role no longer needs to be performed by anyone. The job has been eliminated due to structural change, technological shift, business contraction, or genuine business need. Not because you wanted to replace the person with someone cheaper.

2. The employer complied with consultation obligations. If a modern award or agreement requires it, you consulted. Full stop.

3. The selection was made fairly. If multiple people could do the role, you applied fair, objective, documented criteria.

Employers often tick boxes 1 and 3 perfectly. Then they fail box 2—consultation—and the entire defence collapses.

What Counts as Consultation: The FWC Standard

The Fair Work Commission doesn’t expect a lengthy town hall. But it does expect a meaningful discussion. Here’s what “consultation” legally requires:

• Inform the employee in writing that their role is being made redundant, with the business reason.
• Discuss the decision with them before they’re dismissed (or as close to before as possible).
• Listen to their response. Ask about redeployment options, retraining, other roles, timeline concerns.
• Document the conversation. Email confirmation, meeting notes, or a signed acknowledgment.
• Give them time to respond. A few days minimum. Not 20 minutes before 5 PM on a Friday.

Recent FWC cases highlight common failures:

• Telling the employee they’re redundant via email, with no follow-up discussion.
• Consulting with a union rep but not the employee themselves.
• Presenting the decision as final before the “consultation” conversation happens.
• Failing to mention alternative roles or redeployment opportunities.

All of these have resulted in unfair dismissal findings. The Commission’s view: if you didn’t genuinely listen, you didn’t consult.

Modern Award Consultation Clauses: Check Your Industry

Different awards have different language. Here are the common triggers:

SCHADS Award (community and disability services): “The employer must consult with affected employees about proposed redundancies.”

Health Services Award: “Consultation must occur before the redundancy decision is made.” Failure = the dismissal is not genuine.

Retail Award: “Employers must consult with employees and their representative about job retention and alternatives to redundancy.”

Manufacturing Award: “Affected employees and their union must be consulted before redundancy occurs.”

Transport Award: “Consultation obligations apply. Failure results in unfair dismissal findings.”

Your industry award likely has a clause. Find it. Read it. Comply with it. Print it and stick it on your desk.

If an enterprise agreement covers the employee, check it too—many have stronger consultation language than the award.

Notice Periods: NES Minimums

While you’re consulting, you also need to provide notice. These are the National Employment Standards minimums:

An award or agreement can require more. Many do—5 to 8 weeks is common for senior roles.

Redundancy pay is separate. Minimum amounts based on service:

Pay attention: the FWC looks at whether notice periods and redundancy pay align with what’s reasonable for the employee’s role, experience, and service. Underpaying increases dispute risk.

The Real-World Redundancy Conversation: A Step-by-Step Process

Here’s how to do it right:

1. Prepare (Before the Meeting)

• Write a brief statement explaining the business reason (e.g., “Role outsourced to contractor,” “Department closure,” “Technology replacing function”).
• Research redeployment options. Even if there aren’t any, you need to have looked.
• Have the redundancy pay calculation ready.
• Have a support person in the room (HR, or a witness).

2. Schedule (At Least 3 Days Out)

• Email the employee: “I’d like to meet with you on [date] at [time] regarding your position. It’s important we speak in person.”
• Don’t ambush them. Don’t do it at the end of the day on a Friday.

3. Conduct the Conversation

• Start with empathy: “This is difficult news. Your role is being made redundant effective [date].”
• Explain why: “Due to [specific business reason], we’ve made the decision to discontinue this position. This is not a reflection on your performance.”
• Ask for their input: “Do you have any questions? Are there other roles in the business you’d be interested in discussing?”
• Discuss timeline, pay, and notice.
• Offer support: EAP, outplacement, time off for job interviews.

4. Document (Immediately After)

• Send a follow-up email summarizing what was discussed, what you offered, and next steps.
• Keep notes of what the employee said. Did they ask about other roles? Did you discuss those options?

5. Confirm in Writing

• Send a formal redundancy letter including:
  • Final date of employment
  • Redundancy pay amount (with calculation)
  • Notice period (if not already served)
  • Any benefits due (leave payout, superannuation, etc.)
  • Final payslip date

Common Pitfalls: What the FWC Has Rejected

The Commission sees these mistakes again and again:

• No written notice: Verbal announcement only. The employee has to ask HR to confirm what’s happening.
• Simultaneous notice and dismissal: Telling them they’re redundant and walking them out the same day. The FWC sees this as lack of genuine consultation.
• Failure to identify alternatives: You didn’t ask about or offer other roles, even if they existed.
• Union consultation only: You spoke to the union rep but never actually consulted the employee.
• Presenting the decision as final before discussion: “We’ve decided to make you redundant. Do you have any questions?” isn’t consultation.
• Inadequate notice period: Giving less than the modern award requires (if it specifies more than NES).

All of these have resulted in unfair dismissal findings with compensation.

Redundancy Pay: The Floor, Not the Ceiling

The statutory redundancy amounts above are minimums. If the role is senior, the tenure is long, or the notice period is long, a court or the FWC may expect more.

Some industries have custom redundancy formulas in their awards. Check.

If you’re making someone redundant after 15 years of service, a 4-week payout looks tight and invites dispute. The FWC may award additional compensation.

After the Redundancy: Your Documentation Is Your Defence

If an unfair dismissal claim comes in, the FWC will ask:

• Did you consult? (Show emails, meeting notes, follow-up letter.)
• What consultation did you do? (Describe the conversation, who attended, what was discussed.)
• Did you consider alternatives? (Show your notes on redeployment, other roles, alternatives.)
• What notice period did you give? (Show the letter, final date.)
• How was the redundancy pay calculated? (Show the calculation against the award/agreement requirement.)

Employers who can produce a clear paper trail—emails, notes, a follow-up letter summarizing the discussion—win. Employers who say “I told them verbally” and have no evidence lose.

Action Checklist: Redundancy Done Right

Before you proceed with any redundancy:

• Check the applicable modern award or enterprise agreement for consultation requirements.
• Confirm the minimum notice period (NES or award, whichever is longer).
• Calculate redundancy pay using the correct formula.
• Identify redeployment options and discuss them with the employee.
• Schedule a private, in-person meeting (at least 3 days notice).
• Attend with a support person (HR, manager, witness).
• Explain the business reason clearly and factually.
• Ask for the employee’s input and listen to their response.
• Send a follow-up email summarizing the conversation.
• Provide a formal redundancy letter with all entitlements.
• Keep all documentation for at least 3 years.
• Process final pay on time.

Fair Work Centre Membership: Redundancy Support

Redundancies are complex. An FWC claim can cost $50k+ in legal fees alone, let alone settlement or compensation.

Fair Work Centre members get:

• Direct access to employment lawyers (not call centre advisors).
• Pre-made redundancy letter templates, tailored to your award.
• Consultation checklist and document templates.
• Unlimited advice on your specific redundancy scenario.

A single consultation call often saves you from a six-figure unfair dismissal claim.

Key Takeaway

Redundancy is hard. But it’s not complicated if you consult properly. The FWC’s message is clear: if you didn’t genuinely discuss the redundancy with the employee, the dismissal isn’t genuine, and you’re liable.

The cost of consultation? A few emails, a 30-minute meeting, and some careful listening. The cost of skipping it? $95,050 in compensation, plus legal fees, plus management time, plus damage to your reputation.

Get the consultation right. Document it. Stick to the notice period and redundancy pay. And if you’re unsure whether your modern award requires consultation, ask—before you dismiss.

For more information on redundancy compliance or to discuss your specific situation, contact Fair Work Centre on 1300 161 828 or visit our free advice call.