Employment LawIf you are restructuring your business

& making a position redundant…

September, 2016By Sarah Hovanyecz

Business Lawyer

Legal DisclaimerThis presentation is offered for general information

purposes only. It does not constitute specific legal

advice or opinion. You should not act or rely upon any

of the information contained within this seminar

without seeking the advice of a qualified solicitor who

specialises in the particular area of expertise and

jurisdiction that you require.

IntroductionIf you are restructuring your business and making a position redundant make sure that you are aware of the consequences of doing so or you may find yourself in a situation where the dismissed employee can bring a claim against you.

The Hidden RisksIt is a business owner's prerogative to restructure their business to make it more efficient.

However, as an employer you need to be aware of some of the "hidden risks” of making employees redundant and make sure that your restructure isn't viewed as covering up an alternate reason for terminating the employee.

Adverse Action Claim

What is an ‘adverse action claim’?

If you terminate an employee because they have exercised, or sought to exercise, a workplace right (e.g. maternity leave) they may have an adverse action claim against you.

Case Example - Summary

In the recent case of Heraud v Roy Morgan Research Ltd (No 2) [2016] FCCA 1797, the FWC determined that the employer had taken adverse action against an employee who was on maternity leave at the time her position was made redundant and was ordered to pay her compensation for economic and non-economic loss.

Case Example – Adverse Action

The employee was informed that her position was being made redundant due to a company restructure just as she was nearing the end of her maternity leave.

The employee had made a request for flexible work arrangements but her employment was terminated by way of redundancy.

Case Example – The Decision

The FWC considered that, in making the employee's position redundant and thus terminating her employment, the employer had taken adverse action against her and that the reason it did this was because she had exercised her workplace rights to take maternity leave and to request flexible working arrangement.

Case Example – The Lesson

The employee was awarded compensation for non-economic loss and economic loss, and the FWC commented that it was important in this case to recognise:

"... that prevailing community standards demand recognition of the fundamental entitlement of an employee to take paternal leave to care for their child ..."

Your ObligationsEmployers also need to be mindful of their obligations about:

Consulting with employees covered by a modern award or enterprise agreement to see whether there are any alternative arrangements that can be put in place to avoid redundancies.

Redeploying employees to other positions wherever possible, even if that position is at a lower level with less remuneration.

How to Minimise RiskIf you are restructuring your business (or there is a transfer of business) and there are likely to be redundancies, you should obtain legal advice about the process to minimise the risk of an employee making a successful adverse action or unfair dismissal claim.

Turnbull Hill Lawyers – Contact MeIf you have any further questions about terminating employees, or you'd like to discuss a related matter, please do not hesitate to call me:

Sarah Hovanyecz on:

1800 994 279 or email

I will endeavour to respond to your enquiry within 24 hours.