Are redundancies becoming the new form of termination?

So as we all know when we have a situation where an employee is not performing up to standard, as a good and diligent employer, you conduct a performance management process where you counsel the employee to understand why it is he/she is not meeting expectations… as a result the employee improves productivity or continues to be counseled until a change is made (or forced)… that of course is the way it should be done!

It seems that my time in HR combined with appropriate training courses missed something, because we are seeing that some employers have a different approach… when they have a serious problem with an underperforming employee, they don’t waste valuable time on a long and protracted (albeit necessary) performance management program and/or the potential issues (i.e. unfair dismissal); no… these managers instead initiate a Redundancy Deal!!!

In reading a recent article it seems that [some] managers will make their employees redundant, a practice that has become commonplace rather than dealing with real underlying issues that are becoming apparent in many Australian workplaces. So redundancies are being used to make the problem go away!

Suffice to say [some] organizations will structure redundancies so as to avoid difficult conversations about an employee’s performance or dealing with a breakdown in the relationship between the employer and the employee. And in some cases, such terminations actually make money for the business. Reports suggest that savings are made despite the redundancy payment because the Company will no longer have to pay the redundant worker. Then of course the work of the employee who leaves will most likely be picked up by someone on a lesser salary.

When considering legislation relating to the Termination of Employment, it is stated that it is lawful for an employer to dismiss an employee if it is a genuine redundancy or if the dismissal would not be considered harsh, unjust or unreasonable or if the dismissal is consistent with the ‘Small Business Fair Dismissal Code’ and further the National Employment Standards (NES) state that ‘an employee is entitled to redundancy pay from the employer if [the employee] is terminated at the employers initiative because they no longer require the job to be performed by the employee (or anyone) except where this is due to the ordinary and customary turnover of labour.

Given the above definition, employers using redundancy the way they do is in contravention of the provision of the NES, and such contravention could be subject to penalties! When it comes to ending the employment relationship Companies cannot try to be clever and expedite the process by using redundancy and its associated benefits. Companies MUST ensure they conduct a legal and appropriate process, and if that includes a performance management process, then so be it…besides you just might find that with the right amount of counselling and development, that employee could become a very productive member of the team.