How is redundancy defined in relation to employment law?
by The Findlaw Team
Most readers will have a conception of what the term “redundancy” means in relation to employment matters. However, we here at FindLaw love unwrapping legal concepts and want to provide a legal explanation to commonly understood terms, and in this instance, it’s all about the common law definition of redundancy.
The model definition
The definition of redundancy as articulated by Bray CJ in R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Ltd (1977) 16 SASR 6, is often cited as the classic description of redundancy. His Honour made the following remarks in relation to the concept (at 8):
“[T]he concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone.”
Circumstances where an employee may be made redundant
Although the description of redundancy as stated by Bray CJ may be seen as the classic definition, generally speaking, the courts have been unwilling to outline a comprehensive definition of the concept. However with that being said, numerous case laws since Adelaide Milk Supply Co-Op Ltd have outlined some of the following the circumstances that may give rise to redundancy:
- the business closing;
- the business being sold;
- technological change;
- changes to the organisation;
- outsourcing of the relevant part;
- privatisation resulting from a governmental undertaking;
- restructuring of the business to increase the competitiveness or profitability of the business;
- the duties of the relevant position are split up and spread to other employees.
Generally speaking, the question relating to whether an employee has been made redundant will turn on the words used in the relevant contract, statute, award, or enterprise agreement.