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Redundancy: the 5-test framework

A quick-reference decision flow for employers considering a redundancy. Designed to surface the questions that matter, not replace tailored advice.

Redundancy under the Fair Work Act is genuine only when three legal tests are met, and even a strong process can be undone by weak documentation or pay calculation errors. This framework walks through the five questions every employer needs to answer before terminating a role.

Is the position genuinely no longer required?

Has the work disappeared, been redistributed, or simply moved to someone else? "Genuine" means the role itself is gone, not that you'd prefer a different person doing it.

Where it goes wrong: redundancy used as a substitute for performance management. The work still exists, just done by someone else. Fair Work sees through this very quickly.

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Have you met your consultation obligations?

Consultation requirements change depending on your industry award, enterprise agreement, contracts and policies.

Where it goes wrong: a 10-minute meeting to "tell" someone is not consultation. Failing this step is the most common reason a "genuine" redundancy loses that status at the FWC.

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Have you considered redeployment?

Including work in any associated entities, lower-level roles, and different locations. The test is what is reasonable in your circumstances, not what is convenient to you.

Where it goes wrong: assuming there is nothing available without genuinely looking. Genuine consultation should surface these items to resolve and document correctly.

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Have you calculated pay and notice correctly?

Obligations and the cost of redundancy can change dramatically based on the Award, EA, contract, and industry-specific schemes.

Where it goes wrong: employers using general figures or information sourced that may not reflect their actual obligations. The result being underpayment and disputes regarding the redundancy.

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Is the whole process documented?

Each step of the process needs to be documented in the correct format to ensure that all decisions are defensible, appropriate and objective.

Where it goes wrong: A caring and consultative process can still fall apart if an individual challenges the outcome or the rationale and the employer has not documented effectively.

Three things to watch for

1. Sham redundancy

Treating "redundancy" as a polite exit when the underlying issue is performance, behaviour, or restructure-driven role replacement. If the work continues, it is not a genuine redundancy.

2. The consultation clock

Awards specify minimum consultation periods. Starting the conversation late, or having it after the decision is locked in, voids the "genuine" status.

3. Multiple instrument check

Different rules apply across different instruments. Whichever is most favourable to the employee prevails.

A quick-reference decision flow for employers considering a redundancy. Designed to surface the questions that matter, not replace tailored advice.

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