Few workplace events generate as much stress, uncertainty, and potential for conflict as redundancy and organisational restructuring. For employees, being told their role is no longer needed can be devastating — triggering financial anxiety, a sense of betrayal, and serious questions about whether the process was handled fairly. For employers, restructuring decisions are rarely straightforward, and the legal, financial, and reputational risks of getting it wrong are significant. In the 2022–2023 financial year alone, the Fair Work Commission received over 11,000 unfair dismissal applications — with disputes over the genuineness of redundancies representing a substantial proportion.
The good news is that most redundancy and restructuring disputes don’t need to end up before a tribunal. Workplace mediation offers a faster, less adversarial, and far more cost-effective pathway for resolving these disputes — whether you’re an employee who believes your redundancy wasn’t genuine, or an employer navigating a complex restructure and wanting to minimise legal exposure.
Understanding Redundancy Under Australian Law
Before exploring how mediation can help, it’s important to understand what the law actually requires when it comes to redundancy in Australia.
Under section 389 of the Fair Work Act 2009 (Cth), a dismissal is a “genuine redundancy” only if three cumulative conditions are met. First, the employer must no longer require the employee’s job to be performed by anyone because of changes in the operational requirements of the business. Second, the employer must have complied with any obligation in a modern award or enterprise agreement to consult with the affected employee about the redundancy. Third, it must not have been reasonable in all the circumstances to redeploy the employee within the employer’s enterprise or an associated entity.
If any one of these requirements is not satisfied, the redundancy is not genuine — and the affected employee may be entitled to bring an unfair dismissal claim before the Fair Work Commission.
The Fair Work Ombudsman provides clear guidance on these requirements, and employees who believe their redundancy was not genuine are encouraged to seek advice quickly, as strict 21-day time limits apply for lodging unfair dismissal applications.
The Consultation Requirement
One of the most commonly misunderstood — and frequently breached — elements of genuine redundancy is the consultation obligation. Most modern awards and enterprise agreements contain “major change” clauses that require employers to consult with affected employees before making a final decision to implement redundancies. This means providing information about the proposed changes, giving employees an opportunity to respond, and genuinely considering their input — including any suggestions about alternatives to redundancy.
Consultation is not merely a box-ticking exercise. Recent Fair Work Commission decisions have made it clear that a failure to consult properly — even where the operational reasons for the redundancy are sound — can render the entire redundancy non-genuine and expose the employer to an unfair dismissal claim.
The Redeployment Obligation
The redeployment requirement has become an increasingly significant area of legal risk for employers, particularly following the landmark High Court of Australia decision in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29.
In this case, the High Court unanimously held that when assessing whether redeployment would have been reasonable, the Fair Work Commission can conduct a broad inquiry into whether the employer could have made changes to how it uses its workforce — including whether roles currently performed by contractors or labour hire workers could have been offered to permanent employees facing redundancy. The Court stated that the language of section 389 “does not prohibit asking whether an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for a person who would otherwise have been redundant.”
This is a significant shift from the previously understood position that employers were only required to consider existing vacant roles. For any business planning a restructure, this decision means that redeployment considerations must now extend to the entire workforce structure, including contractor and labour hire arrangements.
Where Redundancy and Restructuring Disputes Arise
Disputes in this area typically fall into several common categories, and understanding them can help both employers and employees appreciate why mediation is so well-suited to resolving these matters.
The redundancy wasn’t genuine. The most common dispute occurs when an employee believes the real reason for their termination was not operational change, but something else — poor performance management disguised as a restructure, a personality clash with a manager, or even retaliation for raising a workplace complaint. The Fair Work Commission has consistently found that where an employer hires someone else to perform substantially the same role shortly after a “redundancy,” the dismissal is unlikely to be genuine.
Consultation was inadequate. Even where an employer has legitimate operational reasons for restructuring, a failure to follow proper consultation processes can invalidate the redundancy entirely. Disputes frequently arise when employees feel they were presented with a predetermined decision rather than genuinely consulted, or when the consultation period was unreasonably short.
Redeployment wasn’t properly considered. Following the Helensburgh Coal decision, employees have stronger grounds to challenge redundancies where they believe the employer failed to explore all reasonable redeployment options — particularly where contractor or labour hire workers were performing roles the redundant employee could have filled.
Redundancy pay or entitlements are disputed. Disagreements over the correct calculation of redundancy pay, notice periods, accrued leave, or other entitlements are common, particularly for long-serving employees or those with complex employment arrangements. Under the National Employment Standards, redundancy pay ranges from four weeks’ pay for employees with one to two years of continuous service, up to 16 weeks’ pay for employees with nine to ten years of service. Employees with ten or more years of service are entitled to 12 weeks’ pay. However, where an enterprise agreement or employment contract provides for more generous entitlements, disputes can arise over which instrument applies or how specific terms should be interpreted. Employers should also be aware that the Fair Work Commission has the power to vary redundancy pay in certain circumstances — for example, where the employer has obtained acceptable alternative employment for the employee — but only the Commission can make such a determination.
Selection criteria were unfair. When an employer is restructuring and must choose between multiple employees for a reduced number of roles, disputes can arise over the fairness and transparency of the selection process. Employees may question whether the criteria used were objective and relevant, whether they were applied consistently, or whether the process was influenced by personal relationships, favouritism, or unlawful considerations such as age, gender, or the exercise of a workplace right. A robust, documented, and transparent selection process is essential — and where disputes do arise, mediation provides an effective forum for examining these concerns without the formality and expense of a tribunal hearing.
The Cost of Getting Redundancy Wrong
The financial consequences of a poorly handled redundancy can be severe. Defending an unfair dismissal application through to a hearing at the Fair Work Commission can cost an employer tens of thousands of dollars in legal fees alone — and that’s before factoring in the cost of management time, document preparation, and potential compensation orders.
If a dismissal is found to be unfair, the Commission can order compensation of up to 26 weeks’ pay (capped at half the high-income threshold) or, in rarer cases, reinstatement of the employee. For general protections claims — which can arise where an employee alleges they were made redundant for an unlawful reason such as exercising a workplace right — the potential financial exposure is even greater, as these claims are heard in the Federal Circuit and Family Court and are not subject to the same compensation caps.
Beyond the direct financial costs, there are significant reputational and cultural consequences. A restructure that is perceived as unfair by the remaining workforce can severely damage employee morale, trust in leadership, and productivity. High-performing employees who witness colleagues being treated poorly during a restructure are more likely to start looking for other opportunities themselves — compounding the very workforce problems the restructure was intended to solve.
Data from the Fair Work Commission shows that approximately 75 to 78 per cent of unfair dismissal matters settle at conciliation — meaning the vast majority of these disputes could have been resolved earlier, at less cost, had the parties engaged in structured mediation before the matter escalated to a formal claim.
How Mediation Helps Resolve Redundancy Disputes
Mediation is a voluntary, confidential process in which an independent, accredited mediator assists the parties to communicate openly, identify the real issues in dispute, explore options, and work toward a mutually acceptable resolution. Unlike tribunal hearings, mediation is non-adversarial, flexible, and focused on practical outcomes rather than legal technicalities.
Here’s how mediation can help in the specific context of redundancy and restructuring disputes.
For Employees: A Voice and a Fair Process
Employees who feel blindsided by a redundancy often describe the experience as one where they had no voice and no opportunity to be heard. Mediation directly addresses this. It provides a structured, safe environment in which the employee can express their concerns, ask questions about the process, and explore whether their entitlements have been correctly calculated — all without the formality, delay, and adversarial nature of tribunal proceedings.
In many cases, what an employee wants isn’t just financial — it’s acknowledgement, clarity about why the decision was made, a fair reference, or assistance with finding new employment. These are outcomes that a tribunal has limited power to order, but which mediation can deliver with ease. Unlike a formal hearing where the focus is on whether the employer met its legal obligations, mediation allows the conversation to address the employee’s full range of concerns — including the emotional impact of losing their job and their need for dignity and respect throughout the process.
Mediation also gives employees greater control over the outcome. In a tribunal hearing, a Commissioner makes the decision and the parties must accept it. In mediation, nothing is imposed — any agreement reached is one that both parties have voluntarily accepted, which tends to result in higher satisfaction and better compliance from both sides.
For Employers: Risk Mitigation and Faster Resolution
For employers, mediation offers a way to resolve disputes quickly and confidentially before they escalate into costly formal proceedings. Engaging a mediator early — ideally during the restructure process itself — can help identify and address employee concerns before they become formal complaints or unfair dismissal applications.
Mediation also allows employers to negotiate outcomes that go beyond what a tribunal might order. For example, an employer might agree to provide outplacement support, extend the notice period, offer a tailored redundancy package, or provide a positive statement of service — arrangements that resolve the matter entirely and reduce the risk of future litigation.
The cost of mediation is a fraction of what defending a formal claim would cost. Most workplace mediations can be completed in a single session, often within a few hours, compared to the weeks or months it takes for a matter to progress through the Fair Work Commission process.
Preserving Workplace Relationships and Culture
Restructuring affects everyone, not just the employees whose roles are made redundant. The remaining workforce watches closely to see how their employer handles the process. A restructure that involves open communication, genuine consultation, and fair treatment of affected employees — supported by mediation where disputes arise — sends a powerful message about the organisation’s values and leadership.
By contrast, a restructure marked by secrecy, poor communication, and legal threats can destroy workplace culture and trust for years. Mediation provides a constructive alternative that protects relationships and preserves the employer’s reputation as a fair and reasonable workplace.
Practical Steps: Using Mediation in a Restructure
Whether you’re an employer planning a restructure or an employee facing redundancy, there are practical ways to use mediation to achieve a better outcome.
For Employers Planning a Restructure
Engage a mediator proactively. Consider bringing in an experienced workplace mediator early in the restructure process to facilitate difficult conversations with affected employees, particularly where there is a history of workplace tension or where the restructure will affect long-serving staff.
Use mediation to support consultation. Mediation can supplement and strengthen your consultation obligations under the relevant award or enterprise agreement. A mediator can ensure that consultation meetings are conducted fairly, that employees have a genuine opportunity to raise concerns and suggest alternatives, and that the process is properly documented.
Offer mediation as part of the exit process. Where disputes arise over entitlements, selection criteria, or the fairness of the process, offering mediation demonstrates good faith and often resolves the matter before a formal claim is lodged. This can be significantly cheaper than defending an unfair dismissal application.
Document everything. Regardless of whether mediation is used, thorough documentation of the operational reasons for the restructure, the consultation process, and the redeployment considerations is essential. Preparing thoroughly for any mediation session will help ensure a productive outcome.
For Employees Facing Redundancy
Know your rights. Familiarise yourself with your entitlements under the Fair Work Act, your applicable modern award, and any enterprise agreement. Understanding the three requirements for a genuine redundancy — operational need, consultation, and redeployment — will help you assess whether the process was handled properly.
Act quickly. If you believe your redundancy was not genuine, you have only 21 days from the date of your dismissal to lodge an unfair dismissal application with the Fair Work Commission. However, before taking that step, consider whether mediation might resolve the matter faster and with less stress.
Consider what outcome you actually want. Before entering mediation, think carefully about what a satisfactory resolution would look like for you. Is it additional redundancy pay? A better reference? Assistance with retraining or job placement? Clarity about why you were selected? Mediation allows for creative, personalised outcomes that a tribunal process cannot easily provide.
When Mediation May Not Be Enough
While mediation is effective in the vast majority of redundancy disputes, there are circumstances where formal legal proceedings may be necessary. If an employer refuses to engage in mediation, if the dispute involves allegations of serious misconduct such as discrimination or adverse action, or if there is a significant imbalance of power that cannot be adequately addressed in mediation, seeking legal advice and lodging a formal claim may be the appropriate course of action.
It’s also important to note that mediation does not extend the 21-day time limit for lodging an unfair dismissal application. If you are considering mediation but are approaching this deadline, it may be prudent to lodge your application to preserve your rights while simultaneously pursuing mediation as a parallel pathway to resolution.
Take the Next Step
Redundancy and restructuring disputes are stressful for everyone involved — but they don’t have to be destructive. Whether you’re an employer navigating a difficult organisational change or an employee who believes they’ve been treated unfairly, mediation offers a faster, less adversarial, and more cost-effective pathway to resolution.
Mediations Australia’s accredited workplace mediators have extensive experience helping employers and employees resolve redundancy disputes confidentially and efficiently. We work with parties across Australia, both in person and via online mediation, to find practical solutions that protect rights, preserve relationships, and avoid the cost and stress of tribunal proceedings. Our mediators understand the complexities of Australian employment law and the emotional weight that redundancy carries for all parties involved.
Book a consultation today and find out how mediation can help you move forward.
This article is for general information purposes only and does not constitute legal advice. For personalised guidance regarding your specific situation, please consult a qualified legal professional or accredited mediator.
