Quick Summary
Quick Summary
- A genuine redundancy requires the employer’s job to become genuinely redundant because of operational changes.
- The employer must comply with any applicable Modern Award or enterprise agreement consultation obligations.
- Redeployment, notice and redundancy pay must be assessed before the employment ends.
- A flawed process can expose an employer to unfair dismissal or other legal claims.
Short answer: a genuine redundancy occurs when an employer no longer requires an employee’s job to be performed by anyone because of operational changes. The employer must also comply with any applicable consultation obligations and consider reasonable redeployment. If the role continues in substance, consultation is skipped or the process is used to target an individual, the dismissal may not qualify as a genuine redundancy under the Fair Work Act 2009.
For Australian employers, the safest approach is to separate the business decision from the employee decision. First establish why the work or role is no longer required. Then assess consultation, redeployment, notice, redundancy pay and documentation before issuing a final termination notice. This guide explains the practical requirements.
What is a genuine redundancy?
The job can be redundant even where some tasks continue. However, the employer should be able to explain what has changed and why the original position, as a whole, is no longer required. If substantially the same duties remain and are immediately allocated to another employee, contractor or replacement, the employer may have difficulty proving that the job disappeared.
What are the Fair Work Act requirements for a genuine redundancy?
1. The job must genuinely no longer be required
2. Follow consultation obligations
Many Modern Awards and enterprise agreements require consultation about major workplace change, including changes that are likely to have a significant effect on employees. The Fair Work Ombudsman redundancy guidance is a useful starting point, but employers must read the specific award or agreement that applies.
Consultation should occur before the final decision. Give the employee relevant information about the proposed change, explain the likely effect and invite feedback. Consider the response genuinely and keep notes showing what was discussed. A meeting held after the decision is irreversible is unlikely to demonstrate meaningful consultation.
3. Consider reasonable redeployment
Before confirming termination, identify vacancies and alternative roles within the employer’s enterprise and any associated entity where relevant. Assess whether a role is reasonably suitable by looking at location, pay, duties, hours, skills and the employee’s circumstances. There is no requirement to invent a role, but an employer should be able to show that realistic options were checked.
4. Calculate redundancy pay and final entitlements
Redundancy pay under the National Employment Standards is separate from notice pay and accrued leave. Check continuous service, the employee’s base rate, any award or enterprise agreement, contract terms and possible exclusions. Also calculate payment in lieu of notice where applicable, annual leave, long service leave where relevant, and outstanding wages.
Do not assume every employee receives the same amount. Casual employment, fixed-term arrangements, small business status, genuine apprenticeships and other statutory conditions can affect the result. If the employee’s annual rate is high, check whether any high-income or award coverage issue changes the analysis; the high income threshold from 1 July 2026 is $190,100.
How should an employer run a fair redundancy process?
- Confirm the business change. Record the operational problem and the proposed structure after the change.
- Map affected roles. Compare duties, skills and positions rather than selecting an individual without an objective reason.
- Check the industrial instrument. Identify the Modern Award or enterprise agreement and its consultation procedure.
- Consult before deciding. Provide information, invite feedback and consider alternatives.
- Assess redeployment. Record suitable vacancies considered and why they were or were not reasonable.
- Confirm entitlements. Calculate redundancy pay, notice, leave and any contractual or industrial payments.
- Communicate and retain records. Give a clear written outcome and keep the supporting documents securely.
Employers can also review the practical resources on redundancy advice for employers and use termination letter and redundancy document templates as part of their preparation.
⚠️ A redundancy is not automatically genuine because a position title disappears
The Fair Work Commission can examine the real substance of the employer’s decision. If the work continues substantially unchanged, consultation is skipped, or a reasonable redeployment option is ignored, the employer may struggle to rely on the genuine redundancy defence.
Key Takeaways
Key Takeaways for Employers
- ✓Document the operational reason for the role being removed, not merely the employee being selected.
- ✓Consult meaningfully and give affected employees relevant information before making a final decision.
- ✓Check redeployment, award, contract, notice and redundancy-pay obligations separately.
- ✓Keep a clear record of the business decision, consultation and final payments.
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What are the main risks in a defective redundancy?
The most common risk is an unfair dismissal application. Eligible employees generally have 21 days from the date of dismissal to apply to the Fair Work Commission. The Commission may examine whether the job was genuinely redundant, whether consultation obligations were met and whether redeployment was reasonable. If the genuine redundancy defence fails, the employer may need to defend the dismissal on other grounds.
There can also be separate risks. A redundancy connected to a protected workplace right, discrimination, pregnancy, illness or another prohibited reason may raise general protections or discrimination issues. Incorrect final payments may create an underpayment problem. Inconsistent explanations can undermine credibility, particularly if internal documents suggest a different reason from the redundancy letter.
How can employers improve the process?
Use a redundancy checklist, appoint one decision-maker to maintain consistency, and keep the business evidence with the consultation record. Managers should not promise an outcome before consultation is complete. Communications should be factual, respectful and limited to the operational reason, the proposed impact and the employee’s opportunity to respond.
For practical employer-side support, Fair Work Centre can help review the process, documents and proposed communications. You can also access free employment documents and templates before starting the process.
When is a redundancy not genuine?
Selection criteria should be objective and connected to the future business structure. Depending on the circumstances, employers may assess skills, qualifications, experience, role requirements and future operational needs. Avoid criteria that are vague, personal or inconsistent. If a pool of employees is affected, explain the pool and the selection method before applying it.
What should a redundancy letter include?
A redundancy letter should identify the operational change, explain that the employer’s decision concerns the role rather than a disciplinary finding, state the proposed or confirmed termination date, and outline notice and final payments. It should also refer to the consultation that occurred and explain any redeployment outcome. The wording must match the business case and meeting records.
Redundancy checklist for Australian employers
- Identify the operational change and the future organisational structure.
- Check the employee’s contract, Modern Award, enterprise agreement and workplace policies.
- Identify affected roles and apply consistent, documented selection criteria.
- Give written information and conduct consultation before the decision is final.
- Search for reasonable redeployment options and record the assessment.
- Check whether redundancy pay, notice or an exemption applies.
- Prepare a consistent outcome letter and final pay schedule.
- Retain evidence securely, including meeting notes and calculations.
General guidance only: redundancy law is fact-specific. Employers should obtain advice on the particular award, agreement, contract, workforce structure and proposed change before acting.
Frequently Asked Questions
A redundancy is generally genuine when the employer no longer requires the employee’s job to be performed by anyone because of operational changes. The employer must also comply with applicable consultation obligations and have considered reasonable redeployment where required. The focus is on whether the job has genuinely disappeared, not simply whether the employee has been replaced or selected for termination.
Usually, yes where a Modern Award or enterprise agreement applies consultation obligations to major workplace change or termination of employment. Consultation should happen before the decision is final, include relevant information about the proposed change, and give the employee a genuine opportunity to respond. Employers should check the applicable instrument rather than rely on a generic redundancy letter.
It may be difficult to establish a genuine redundancy if the same work continues substantially unchanged and is simply given to another person. A change in title alone is not enough. The employer should document what operational change occurred, what duties have changed or ceased, and why the original job is no longer required.
A genuine redundancy may fail if there was reasonable redeployment available within the employer’s enterprise or an associated entity, depending on the circumstances. Redeployment is assessed in context, including the location, duties, skills and terms of the available role. Employers should identify and document roles considered, even where no suitable option exists.
Redundancy pay is generally calculated under the National Employment Standards, subject to exclusions, service requirements, award or agreement terms, and any approved exception. The amount can depend on the employee’s continuous service and base rate of pay. Employers should calculate redundancy pay separately from notice, accrued annual leave and other final entitlements.
The genuine redundancy provisions can apply to small businesses, but an employer with fewer than 15 employees must also consider the Small Business Fair Dismissal Code when relevant. Small business employers should still document the operational reason, consultation steps where required, redeployment assessment and final entitlements. Small business status does not make a defective process risk-free.
An employee may challenge the dismissal, including by making an unfair dismissal application within 21 days of dismissal if eligible. The Fair Work Commission may examine whether the job was genuinely redundant, whether consultation occurred and whether redeployment was reasonable. Other issues, such as adverse action, discrimination or underpayment, may create separate exposure.
Keep the business case, organisational changes, financial or operational evidence, consultation correspondence, meeting notes, redeployment assessment, selection rationale and final entitlement calculation. Documents should explain the role and business change in factual terms, avoid personal or discriminatory reasons, and be consistent with what was communicated to the employee.
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