Redundancy consultation: what Australian employers must do

For a redundancy to be deemed “genuine”, the employer must follow the consultation requirements set out in the relevant award or enterprise agreement. Failure to do this can result in the employee applying for an unfair dismissal remedy. A structured redundancy consultation process can avoid unnecessary risk to the business.

A redundancy consultation is the obligation to consult employees before finalising a redundancy, as set out in their award or enterprise agreement. The consultation is more than just a courtesy to the employee, it is a legal duty. 

Skipping or rushing the redundancy consultation requirements can expose the employer to legal claims and large financial penalties, so following a defined step-by-step process can reduce the potential for problems further down the line. 

Employers must hold a consultation whenever major change is expected within the business. They are most often held when redundancies are on the cards, but can also apply to restructures or significant changes to hours. Consultation requirements are outlined in the relevant award or enterprise agreement. 

A consultation must be held for both compulsory and voluntary redundancies. The fact that an employee is choosing redundancy does not eliminate the requirement to consult. Every employer, regardless of size, is covered by redundancy consultation requirements. The 2026 case of Orientile Pty Ltd v Zhang shows how small businesses can be tripped up by not following the consultation requirement.

Employers planning to dismiss 20 or more staff in a 90 day period can hold collective consultations, rather than individual consultations.

The Fair Work Act does not specify a fixed number of days for the redundancy consultation period – the timeframe depends on the award or enterprise agreement. The period must be meaningful – that is to say, the employer cannot set a short, token window but must provide a genuine opportunity for responses. 

The consultation must also happen as soon as practically possible after a decision to make redundancies has been made. Depending on the size of the organisation and the scale of redundancies, consultation periods can last anywhere from a few days to a few weeks. 

Minimum notice periods, or pay in lieu of notice, must still be given.

A structured redundancy consultation process means that employees are treated fairly and the organisation minimises its risk exposure. Follow these seven steps to ensure a lawful consultation process for redundancy in Australia:

Verify the employee’s job classification against the modern award, and search internal records to see if a registered enterprise agreement supersedes it. Don’t assume white collar exemption, as such employees may be covered under the Clerks – Private Sector Award. 

Check the award or enterprise agreement for each employee to understand the consultation requirements, so that the entire process can be planned compliantly. 

The employees at risk of redundancy must be told about the plans as soon as practical. Trade unions or employee representatives must also be informed, if relevant. 

Provide confirmation of the intention to make redundancies in writing, including a clear statement that the role is being considered for redundancy, the reason for the proposed changes, an invitation to a formal consultation meeting, the right to bring a support person, and confirmation of next steps and proposed timeline. 

During the consultation meeting, employees must be allowed support. This can be from a trade union representative, a family member, a colleague, a friend, or a lawyer. 

The support person is allowed to take notes, talk privately to the employee, and ask for breaks. They cannot speak on behalf of the employee or act as an advocate, although union representatives have broader rights than other support people. 

A redundancy may not be considered genuine if the business has not considered redeploying the employee elsewhere within the organisation. That includes associated entities too, not just the same team, office, or business unit. The alternative role must be suitable in terms of skills, remuneration, seniority, and location. 

As an alternative to redundancies, the employer may also consider reduced hours, hiring freezes, retraining, and upskilling. 

The consultation should be a genuine two-way conversation. In practice, that means thoughtfully responding to suggestions, questions, feedback, and alternative proposals received from the employee during the consultation period – not just paying them lip service.  

Even if the outcome is unlikely to change, all issues raised should be documented and considered with an open mind. Explain why suggested alternatives are unviable, following genuine consideration, and be ready to explain selection processes and business reasoning. Respond to all feedback in writing. 

Should the worst happen and the employee raises a grievance or pursues an unfair dismissal claim, it will help enormously if the business can prove that a fair and genuine process was followed. Documenting every conversation, meeting, and decision, will ease the path to a positive outcome. 

Remember that no decision to make a redundancy can be taken until the official employee consultation on the redundancy has been completed. 

The final decision should be shared at a formal meeting (again with a support person, if requested). At this stage, the employer should provide official confirmation of redundancy and an outline of final redundancy pay and entitlements. They can also give details of outplacement support at this stage, if a provider has been engaged. 

Perhaps one of the most important steps in this process is the consideration of redeployment. This is often overlooked by employers, but is something that the Fair Work Commission will consider when making its rulings. Reasonable redeployment is a necessary consideration if a redundancy is to be deemed genuine. 

Outplacement providers can support internal redeployment by working with employers and displaced workers to match skills to open vacancies across the business. 

If an employer is making 15+ redundancies, mandatory notification rules kick in. Section 530 of the Fair Work Act requires employers dismissing 15 or more employees for reasons of “an economic, structural or similar nature” to give written notice about the proposed dismissals to the CEO of Centrelink. This notification must be given as soon as possible, and no dismissals can take place until it is submitted. 

The form for the notification can be found on the Services Australia page. The details on the document should be copied onto the company letterhead, with the name of the company, its registered address, the number of affected staff, and their employment types, and be emailed to national.business.gateway@servicesaustralia.gov.au. 

The cost of getting the redundancy consultation procedure wrong goes beyond the legal costs and the time involved in defending an unfair dismissal claim. The unfair dismissal process itself is likely to bring negative exposure to the business, whether you win or lose.  

Add to that the potential outcomes if the employee wins: there may be a reinstatement order, including back-pay for lost earnings, or a financial compensation order of up to 26 weeks of the employee’s pay or half of the high-income threshold. The maximum compensation for 2026 is $95,050.

Breach of award or enterprise agreement clauses may invite regulator or union scrutiny, leading to civil penalties, and on top of that is the inevitable disruption to the business, damage to the employer brand, and loss of trust among retained employees.

In summary: 

• A redundancy consultation must be held in line with the requirements of the award or enterprise agreement.
• There is no set timeframe for the consultation, but it must be reasonable.
• Affected employees are entitled to support during the consultation meetings.
• All feedback from the consultations must be genuinely considered. 
• Redeployment options should be explored before confirming redundancy.

Yes, a redundancy consultation is legally required if the employee is covered by an award or enterprise agreement. Most employees are covered, but for the few that are not, a formal consultation process is not mandated. It is, however, considered best practice.

There is no set time limit for a redundancy consultation, but the time allowed must be meaningful. Both employees and Services Australia (if applicable) must be informed as soon as practicable and before dismissals take place. 

A redundancy is not genuine if the role still needs to be performed by someone, or if redeployment is not considered, or if formal consultation processes are not followed. 

For employers looking to carry out a fair and ethical redundancy process, whilst protecting their brand, outplacement is a sensible choice. 

Outplacement firms partner with organisations considering redundancies, to ensure that their employees are supported throughout the process and rapidly land new roles – whether through internal redeployment or externally.