Redundancy: How to handle the consultation process

First published: July 8th 2020
Last updated: March 13th 2023

Having to make redundancies is a tough situation for both employers and employees.

If your business is going through a difficult trading period, you may be looking at ways to reduce expenditure and labour costs are likely to be one of your biggest expenses.

To avoid making this difficult situation worse, it’s important that your redundancy process complies with redundancy and unfair dismissal legislation.

Three key redundancy questions

When reviewing a redundancy-related claim, the Workplace Relations Commission (WRC) generally consider these three key questions:

• Was there a genuine reason for the redundancy?
• Did the employer use a fair selection process?
• Did the employer carry out a fair consultation process?

This post will focus on the last issue and the importance of carrying out effective and meaningful consultations with staff during a redundancy process.

A fair redundancy consultation process

The WRC has stated in previous decisions that the requirement to carry out a fair consultation process will only be satisfied where an employer has engaged in effective and meaningful consultation with the employee through a series of meetings.

A proposed redundancy consultation process

The advice below is what an effective and meaningful redundancy consultation process might look like.

It’s important to remember that every redundancy process should be tailored to the circumstances of each business. So, if you need to make redundancies, remember to consider what constitutes effective and meaningful consultation in the context of your business.

The first step is to hold an ‘at risk’ meeting with all affected employees. The purpose of the meeting is to advise employees that they’re ‘at risk’ of being made redundant. This meeting can be held with individual employees or a group of affected employees.

In the meeting, you must tell them:

• Why the business has decided it’s necessary to make redundancies.
• The procedure you’re going to follow.
• The selection criteria you intend to use.
• Alternatives you have looked at. Also, ask employees if they have any suggestions.
• That they have an opportunity to apply for voluntary redundancy.

After this meeting, the employees should be issued with an ‘at risk letter’. Following on from the first meeting, you should hold a further two to three meetings with the employees individually to discuss any updates and suggestions they have.

Where no alternative to redundancy can be found, the final meeting should be held with employees to tell them whether or not they’re being made redundant.

Once this process has concluded, you’re required to issue any employees whose employment is being terminated with a formal notice of redundancy.

Get your redundancy consultation process right

Going through a redundancy process is a stressful situation for business owners.

As well as being a difficult scenario for employers, redundancy is also a technical area of employment law that could lead to avoidable claims from disgruntled former employees.

To make sure you get your redundancy procedures right, speak to one of our employment law experts on 1800 719 216.