Sometimes, it’s hard for managers to properly articulate why they want to remove someone from their business.

Too often, I have clients from both large and small businesses, calling to saying they’ve reached their limits with a particular poor performer and they just need to remove them from the business. They’re toxic. They are costing the business money. They are not productive. They are not required.

They know the person is not performing, but because they are not performing they are wondering if they even need that role at all. Or perhaps they just want to cut corners and take action quickly. So they decide they just want to remove the role from the business entirely.

But then they’re not entirely convinced as to whether they will need to replace the role or not in the near future.

Confused yet?!

It can get very messy.

So what is the difference between redundancy and a poor performance termination?

Put simply –

Redundancy = it’s about the role or the position
Termination = it’s about the person and their performance

A Redundancy is not about the person. It is about the fact that the employer no longer needs the job done by anyone.
The ultimate outcome? To reallocate or remove tasks entirely from the business.

A Termination is a result of a performance process, where poor performance or under-performance is an issue and is being addressed.
The ultimate outcome? To see an improvement in performance.

If you do go down the redundancy path, how can you make sure it is ‘genuine’?

For a person’s redundancy to be considered genuine, two important factors must be met under the Fair Work Act 2009 (Cth), s389:

(1) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise, and

(2) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

If you can not meet these two important requirements, it probably means you should be looking at performance management of your poor performer. And when there is poor performance involved, redundancy is not always a safest option for your business as you run the risk that they will lodge a claim with the Fair Work Commission, and argue that the ‘redundancy’ is not genuine.

What’s the risk of getting it wrong?

If you make one of your employees redundant, and they can prove that it has not been a genuine redundancy as per the definition outlined above, your business may be faced with an bitter Unfair Dismissal claim. This can not only be costly for your business, but also impact the teams morale and possibly their productivity.

Further, you can’t replace the redundant role for a significant period of time, meaning that you might end up being understaffed or under resourced.

Redundancy VS Termination

The first thing we will ask you to do – is to ask yourself – IS THE ISSUE THE ROLE OR THE PERFORMANCE OF AN INDIVIDUAL?

This will ultimately determine the direction you take.

If it is the Role – then you need to consider whether making the role Redundant is the best outcome.

• Make sure you do not need the employees job to still be done by anyone (i.e. you are not going to hire someone to replace them when they leave).
• Consider suitable Redeployment options or Alternate roles within your business.
• Review your Employment Contracts, relevant Modern Awards, Company Policies and Procedures, Industrial Agreements, and relevant legislation.
• Map out what the Consultation Period should be under the relevant Modern Award, industrial agreement or Employment Contract and put some structure in place.
• Do a Skills Matrix if you need to restructure a team – and work out which roles need to stay, and which roles need to go.
• Ensure your people have the appropriate support mechanisms in place – both those managers who are having the redundancy conversation, as well as the employees involved in a restructure.
• Consider potential company risks – media, unions, adverse commercial implications.
• Communicate. Then communicate again!

If it is the Person – then you need to think about your Performance Management Plan to actively identify issues and improve performance.

• Identify the areas of poor performance or misconduct, as well as what your expectations are in these areas.
• Review company Performance Management and Termination Policies and Procedures.
• Review Fair Work Australia requirements, such as the Fair Work Small Business Code if relevant.
• Use Written Warnings templates to document conversations.
• Create a company Performance Improvement Plan to outline consequences (positive and negative) to encourage buy-in and drive improvement.
• Schedule regular meetings to discuss poor performance and agree on strategies for development.
• Provide coaching, mentoring and support where required.

Let us help you get it right

Unsure as to which direction you need to go? Or perhaps you know if it is the role or the person that needs to change, but you’re just not sure how to go about it.

Contact our team today at projects@commongoalconsulting.com.au or call Nikki on 0472 545 584, and find out how we can help.

Or visit our website to see how we can assist your business today: www.commongoalconsulting.com.au/hr-consulting