Redundancy Requisite HR March Newsletter 2017
Understanding redundancy is important for any business owner, especially now as we experience economic uncertainty and high unemployment rates. In this issue we examine the pros and cons, do's and don'ts, and the alternatives.
Understanding Redundancy If you are considering redundancy as an option, there are key issues that you need to consider and processes you need to follow, to ensure that you are not only compliant, but that you achieve your purpose and not be worse off overall. So let's get to know more about redundancy. Redundancy is when a particular position is no longer required in the company, either because the employer does not need an employee's job to be done by anyone or because the company becomes insolvent or bankrupt. A position may no longer need to be done by anyone because of a result of new technology, a business downturn, business relocation interstate or overseas, organisation restructure or merger/takeover. However not everyone is entitled to Redundancy. It should be noted that small businesses employing fewer than 15 employee don't have to pay redundancy pay and some team member in larger companies don't get Redundancies. Those team members terminated for serious misconduct, or whose period of continuous service with the Company is less than 12 months, or team members employed for a stated period of time, an identified task or project, a particular season or the length of a training agreement, apprentices and casual team members are not entitled to redundancy. Redundancies can be deemed invalid or not genuine, turning what you believe to be a redundancy into unfair dismissal claim, if you do not follow the rules. This can occur if the job still needs to be done by someone (i.e. you hire someone else to do the job), or the person could of reasonably been given another job within your business or an associated entity, or you have not followed any applicable redundancy consultations processes. All awards and registered agreement have a consultation process for major changes like Redundancy, that must be followed. It is not just important to comply with this processes to meet legislative requirements, it is important that you conduct the process in a fair manner with open communication to not only show respect to your team members, but to minimise the negative effects of redundancy on your business.
Do not use Redundancy as an excuse to terminate a poor performing team member. If the team member suspects that the dismissal is not due to a case of genuine redundancy, they maybe entitled to make a claim for unfair dismissal with Fair Work Australia. When a company decides to make team members redundant they usually do so to improve performance / productivity /quality, enhance their competitive advantage, and /or reduce costs. If done well, major economic benefits can be achieved in the form of: Increased company value, Lower overheads, More fluent communication, Increased productivity, Reduced general human costs, Decreased bureaucracy, Faster decision making, Better earning capacity, Improved capability for development, Re-energizing exhausted employees, More pronounced entrepreneurial behaviour, A return to organizational health, Increased competitiveness, Elimination of hierarchies, and Clearer mission However, studies* that examined downsized workplace found that improvements were only observable in the minority of cases. Most did not accomplish the intended improvements, often the changes resulted in a decline in performance. Generally, the decline can be attributed to: 1. Individual's reactions, 2. Loss of Company knowledge and memory, and 3. Post restructure resignation caused by the poor management of the redundancies. If done poorly the negative outcomes of downsizing can take the form of:
Decreased job satisfaction, Unintended staff turnover, Decreased performance, Negative market image, Anxiety, More overtime, Decreased morale, Loss of slack, Increase in training costs, Increased absenteeism, Resistance to change, Loss of key personal, Increased number of temporary workers, Damage to the employer/employee psychological contract, Emergence of special interest groups, Loss of management credibility, Frustration, Scapegoating, Job insecurity, Stress, Increased uncertainty, Communication breakdowns, Curtailment of innovation, Perceptions of unfairness, Increased health issues & behaviours, Increased job demands and workload, Increased dissatisfaction, Negative competition, Teamwork avoidance, Sadness, Survivor's guilt, Depression, Anger, Mistrust, Disappointment, Blame, Decreased organisational commitment, Decreased company loyalty, Decreased respect towards management, Remorse, Envy, Injustice, Betrayal and Fear To conduct a successful downsizing the process should be very well planned with serious consideration of the human factors that play a crucial role. Some of the keys things that management can do to reduce potential negative outcomes and increase changes of success are:
*Outcomes of Redundancy – Different Aspects. K.Krazsz 2004
Develop and implement a Restructure Project Plan: 1. Project goals, roles and responsibilities 2. Communication Plan 3. Consultation Process 4. Restructure Development 5. Restructure Implementation 6. Restructure Review Communication Plan: 1. Understand your stakeholders 2. Determine the key messages 3. Develop targeted approach Consultation Process 1. Understand and apply the Consultation Clause in applicable modern award/s 2. Understand and apply the Dispute Resolution Procedure in applicable modern award/s 3. Ensure open and transparent communication 4. Consider arranging an Employee Assistance Program (EAP) 5. Provide verbal and written information about changes and expected effects 6. Notify team members who might become affected 7. Notify the team that all options and alternatives are being considered 8. Discuss steps to be taken to avoid and minimise negative effects on the team 9. Provide team members with the opportunity to ask questions and share their ideas or suggestions about the changes Restructure Development: 1. Conduct internal and external research 2. Design a structure that supports organisational goals 3. Ensure reallocated work helps team member’s career and helps them stretch and grow 4. When reallocating work ensure that individual’s current workloads are taken into account Restructure Implementation - General: 1. Create opportunities for team members to feel that they have some sense of control 2. Have a clear plan and script for team and individual meetings 3. Be prepared and plan for possible reactions (i.e. shock, distress, anger, hostility, etc) 4. Treat the team member with respect Restructure Implementation – Team Meeting: 1. Explain why the restructure occurred 2. Reinforce how roles are been made redundancy, not people 3. Discuss the consequences for both exiting and remaining team member 4. Discuss what needs to be done to ensure no further redundancies are required 5. Promote the need for change and innovation 6. Discuss the immediate next steps Restructure Implementation – Individual Meetings (Remaining Team Members): 1. Give team member the opportunity to vent 2. Acknowledge their feelings 3. Provide a new position description (reduces job ambiguity) 4. Discuss new roles and reallocation of tasks 5. Discuss new expectations 6. Explain that no further redundancies are planned 7. Provide contact details to either an EAP or an internal support person 8. Provide a Training and Development Plan for any new tasks Restructure Implementation – Individual Meetings (Exiting Team Meetings): 1. Give team member the opportunity to vent 2. Acknowledge their feelings and service with the Company 3. Outline their exit payment and provide a copy in writing 4. Provide an EAP or a Career Transition Coach (Optional) 5. Give exiting team member/s the option of saying goodbye to the team Restructure Review: 1. Review the successes and failures 2. Identify and implement opportunities for improvement 3. Implement ongoing business improvement to prevent further redundancies
The Alternatives After reviewing all the negatives aspects that can
Reduced Working Hours
occur as a results of conducting Redundancies lets
This can be achieved by changing some team
now consider some alternative actions that your
members from full time to part-time, reducing
Company could take to avoid the Redundancy
overtime or implementing Rostered Days Off. An
pathway.
RDO schedule ensures that the business are able to cut some costs whilst employees do not lose
Pay and/or Benefit Reductions
anything beyond one day of work every one to two
This strategy can reduce the costs whilst potentially weeks. maintaining the productivity rate. The effectiveness of this strategy depends on the level of commitment Job Sharing from your employees and their willingness to
This option creates an opportunity to ensure that
continue working hard in the company despite the
the business retains skilled employees whilst
change in benefits. If this is a short term option
allowing employees to create flexible working
rather than a long term option this will be better
hours. In addition it creates increased leave
received.
coverage flexibility. The downside of this is the decreased remuneration the employees would
Use Paid Leave Entitlements
receive, although that may be preferred as opposed
Encourage employees to use their accrued paid leave to termination. This success of this option is entitlements. This option reduces leave balances
dependence on team work and open transparent
whilst maintaining take home wages .
communication between both team members.
Before implementing any of these alternatives, you should consult with a professional, to ensure that your actions do not breach any Award, Enterprise Agreement, or legislation provisions. It is important to analyse the costs and benefits of any strategy affecting your business and make an informed decision that is the best for the business.
Coaching for High Performance Workshop Now more than ever, it is critically important to be getting the most from your team and making sure your workplace
You'll learn the tools and strategies that
is engaged as possible.
qualified coaches use to get the best
$27 only places are limited
results for their clients. Using a coaching-based approach to leadership in today's workplace is moving from a 'nice to have' to a 'must have'. Employee engagement surveys show that people love to work in a coaching-led environment. The question is - Are you using coaching to bring out the best in your team? If you are a leader or a HR practitioner, then you need a core set of coaching skills to help you.... Tap into your teams strengths Have great performance management conversations Manage and shift underperformance Lead in the most effective way possible Lift your team engagement scores
Who should attend? HR practitioners
Supervisors
Leaders
Team Leaders
Project Managers
L&D
Frontline Staff
Anyone who works
Coaches
with people in their
Trainers
day to day role!
Open Door Coaching has been helping leaders overcome workplace challenges for over 13 years and we want to help you too! This workshop is popular all over Australia and places are limited. At this workshop you'll learn the most effective strategies
Workshops are Being Held Nationwide. Canberra, Sydney, Perth, Newcastle, Brisbane, Geelong, Melbourne & Online! Limited places in each city.
to coach for high performance, including: How to leverage peoples strengths How to shift under performance A simple coaching model you can use every day How to have really great performance conversations
For More Information & Booking Online www.opendooronline.com.au/workshop or call 1300 006 324