HR Glossary


What is Redundancy?

Redundancy is the state of being redundant, or extraneous. In the context of human resources, redundancy is the condition of having too many employees doing the same job. This can be caused by organizational downsizing, the retirement of older employees, or the transfer of employees to other departments. When redundancies exist in a company, it can be difficult to determine who should be laid off during times of financial difficulty.

What are the benefits of Redundancy?

There are a number of benefits to redundancy, including:

  • It can help to improve the efficiency of an organization by removing underperforming employees.
  • It can help to motivate employees to work harder, as they may be worried about being made redundant themselves.
  • It can help to reduce costs by eliminating unnecessary positions.
  • It can help to improve communication and cooperation within an organization as employees work together to ensure that everyone is doing their part.

What is the legal requirement for redundancy?

Under the Australian Fair Work Act 2009 (Cth), there is a legal requirement for redundancy. This is where an employee’s job is no longer required because of changes in the workplace, such as automation or a restructure. The employee must be given the option of redeployment to another position before their job is made redundant. If the employee is not offered a position that is suitable, they are entitled to a redundancy payment. The amount of the payment is based on the employee’s length of service and their pay rate.

What are the different types of Redundancy?

There are two types of redundancy: voluntary and compulsory. Voluntary redundancy is when an employee leaves their job of their own accord, usually in order to take another job that is more suited to their skills or to receive a redundancy payment. Compulsory redundancy is when an employee is made redundant by their employer, often because the company is downsizing or restructuring.


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