Global restructuring planning redundancies in Australia

Out-Law News | 03 Dec 2020 | 12:20 pm |

Katie Williams tells HRNews how redundancy laws and procedures operate in Australia.

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  • Transcript

    What does Australian employment law require of employers when it comes to making redundancies? It is an important question if you're a business with a presence in Australia where, just like the rest of the world, mass redundancy exercises are commonplace as businesses restructure in an effort to survive the pandemic. We have been tracking Australia closely in recent months, seeing how different sectors are responding, and we notice the energy sector is back in the news again. Offshore magazine reports how the pandemic has caused a loss of more than 28,000 oil and gas jobs in Australia this year so far, according to figures published by Rystad Energy. The oil and gas sector was already declining oil but the loss of more than 28,000 jobs this year is massive - equivalent to one-quarter of the country’s total count. The article explains how engineering and construction have been amongst the worst hit in the current downturn. More than 8,000 jobs have been lost across those two sectors, representing nearly 29% of all industry job cuts this year. However, the future of the gas industry in Australia is bright. Global demand for gas is projected to grow at a steady rate over the coming decades and gas is expected to play an important role as a transition fuel to renewable energy, due to its lower carbon output. So it is a picture of job cuts now as the pandemic hits hard, but with a focus on restructuring in a way that enables businesses to meet the challenges ahead. So let's turn to consider those job cuts. What does Australian law require of employers? To help with that, Katie Williams who joined me by video-link from Perth:

    Katie Williams: “If a business has plans to restructure which involve redundancies in Australia then I think there are three things to have in mind right at the outset at that crucial planning phase. The first thing is Enterprise Bargaining Agreements - these are the Australian equivalent of collective agreements. Now the organisation needs to understand whether these are in place in respect of any of the Australian workforce because if there are Enterprise Bargaining Agreements that will tell you two things. First, that there is an established relationship with a union or trade unions and secondly, crucially, those agreements will themselves contain express provisions for how to consult in relation to redundancies and those provisions have to be followed. So that's the first point. The second point is about something called modern awards. Modern awards are unique in Australia and they are a type of legal instrument that set terms and conditions for employees in particular industries and in particular job roles and they apply by matter of law. Now, we often find with clients that we advise, who maybe are not headquartered in Australia, and maybe don't have a large corporate presence in Australia, we often find that there is a misunderstanding, or indeed a total lack of knowledge, as to whether there are modern awards covering the workforce and the reason that this is important, again, is that those modern awards will themselves contain consultation provisions which need to be followed in relation to many making large scale redundancies. The third point to bear in mind at the planning stage is, of course, numbers because if the plan involves dismissals for redundancy of at least 15 employees at any one time then there's going to be notification requirements and these are twofold. The first is a notification requirement in relation to any trade unions in respect of members within the workforce. Now, that's not the same as there being collective bargaining or collective agreements in place, it's simply by reference to membership of unions. So that's the first notification obligation. The second notification obligation is one that's made in writing to the relevant government agency here in Australia. Both of these things need to happen before the dismissals take effect. So the three key takeaways, and these are highly relevant at the planning stage, are Enterprise Bargaining Agreements, coverage of modern awards and lastly, numbers."

    You can read more about redundancy procedures in Australia, as well as many other aspects of employment law over there. Katie has written a number of guides and articles - you can find all of them on the Outlaw website.