TL;DR: A genuine redundancy cannot be challenged as an unfair dismissal. Under section 389 of the Fair Work Act, it is genuine when the job is no longer needed by anyone, you have met any consultation duty in the award or enterprise agreement, and redeploying the employee was not reasonable. Miss one test and the Commission can hear the claim.

Last updated 11 October 2026.

Key takeaways

• According to the Fair Work Commission, an unfair dismissal application cannot be made if the dismissal was a case of genuine redundancy under section 389.
• It is the job that must no longer be needed, not the employee’s duties, so redistributing or outsourcing the work can still be a genuine redundancy.
• Consultation only counts if it happens before the final decision, and the obligation comes from the award or enterprise agreement that applies.
• Redeployment is assessed across the business and its associated entities, including lower paid roles and roles in other locations.
• A genuine redundancy still carries NES notice and redundancy pay of 4 to 16 weeks for employers with 15 or more employees.

What makes a redundancy genuine under the Fair Work Act?

A redundancy is genuine when three things are true. The employer no longer requires the person’s job to be performed by anyone because of operational changes. The employer has complied with any consultation obligation in an applicable award or enterprise agreement. Finally, redeploying the person within the business or an associated entity was not reasonable.

In Australia, unfair dismissal laws protect employees by making sure a dismissal is fair and justifiable. When making an employee redundant, those laws still matter. However, they give employers a clear path: if you tick the three boxes, an employee will not have been unfairly dismissed.

That is because the Fair Work Commission treats genuine redundancy as a jurisdictional question. If an employee lodges a claim, the employer can object that the dismissal was a genuine redundancy. According to the Commission, if the employer proves section 389 is met, the Commission has no jurisdiction to hear the claim. If not, it goes on to decide whether the dismissal was harsh, unjust, or unreasonable.

Consider a regional distribution business that closes one of three warehouses. The warehouse supervisor’s job disappears, the award’s consultation clause is followed, and no suitable vacancy exists at the other two sites. In that case, the redundancy is genuine, and an unfair dismissal claim should fail at the first hurdle.

Step 1: Is the job genuinely no longer required by anyone?

A redundancy starts with the job, not the person. The employer must no longer require anyone to perform the person’s job because of changes in the operational requirements of the enterprise. According to the Fair Work Ombudsman, typical causes include new technology, lower sales or production, closure, relocation, and restructuring after a merger or takeover.

What is a genuine redundancy? It is where the employer no longer requires the person’s job to be performed by anyone. It is the ‘job’ that must no longer be needed, as opposed to the employee’s ‘duties’. So it can still be a redundancy if a person’s duties have been redistributed to other employees.

It can also be a redundancy if the role has been outsourced, because the job is no longer being performed by anyone in the business. By contrast, a role that is renamed, lightly reshaped, and filled again within weeks is a warning sign. If you still need someone to do the job, the Fair Work Ombudsman says the dismissal is not a genuine redundancy.

Write down the operational reason before anyone is told. A short business case that names the change, the roles affected, and why the work is no longer needed gives you the evidence the Commission will ask for later.

Step 2: Have you consulted as the award or enterprise agreement requires?

The second test is met when you comply with any obligation to consult about the redundancy in an applicable modern award or enterprise agreement. Consultation must happen before a final decision to terminate, and it must be genuine. In other words, the employee needs a bona fide opportunity to influence the decision maker, even though the employer still makes the final call.

According to the Fair Work Ombudsman, all awards and agreements contain a consultation process for major workplace changes likely to have significant effects on employees. Once the employer has decided to make the change, it must, as soon as possible:

• notify affected employees and their representatives about the proposed changes
• provide all relevant information in writing, including the nature of the changes and their expected effects
• discuss the changes, their likely effects, and measures to avoid or reduce the adverse effects
• promptly consider any matters raised by employees or their representatives.

If no award or enterprise agreement applies to an employee, section 389 imposes no consultation step for that employee. Even so, consulting is still good practice, because it surfaces redeployment options and reduces the risk of a dispute about fairness.

What extra steps apply to 15 or more redundancies?

If you are considering 15 or more redundancies, the Fair Work Ombudsman says you must notify Services Australia in writing before the dismissals. The notice sets out the reasons, the number and categories of employees affected, and the timing. You must also notify or consult a union if at least one affected employee is a member.

Step 3: Could the employee be redeployed to another role?

A redundancy is not genuine if it would have been reasonable in all the circumstances to redeploy the person within the employer’s enterprise or an associated entity’s enterprise. You do not have to create a role. However, you do need to offer a suitable open role that the employee could reasonably move into.

The role needs to be suitable for the employee. That means they have the skills and competence to perform it to the required standard, either immediately or after a reasonable period of retraining. If a role comes with lower pay, you do not have to match the employee’s current remuneration. Still, you do need to offer lower level roles the employee is capable of performing.

Suitable roles in other locations should also be offered. Employers should not assume an employee will refuse a role just because it is in a different city. For a business with several entities, this test reaches across all of them, so the vacancy list for every associated company, brand, and site matters. The Commission’s benchbook adds that advertising a suitable vacancy and making the employee compete for it can mean the redundancy is not genuine.

Suppose a group running several entities has three companies under separate ABNs, and one of them makes its payroll officer redundant. Meanwhile, a sister company is advertising for a payroll coordinator. If the officer could do that job with a few weeks of training, the redundancy is unlikely to be genuine unless the role was offered.

Does the Small Business Fair Dismissal Code cover redundancy?

No. The Small Business Fair Dismissal Code deals with summary dismissal and dismissal for conduct or capacity, not redundancy. So a small business employer with fewer than 15 employees still relies on section 389. The job must be gone, any award or agreement consultation must happen, and redeployment must be considered.

The Fair Work Commission made this point early. In a 2010 decision, Vice President Watson found the Code does not deal with redundancy dismissals. References to redundancy in a government guide to the Code, he said, were not part of the Code itself. So a small business cannot simply assert a redundancy was consistent with the Code. It has to show the redundancy was genuine.

Small businesses do get two real differences. First, an employee must have served 12 months, not 6, before they can claim unfair dismissal. Second, the Fair Work Ombudsman says most small business employers do not have to pay NES redundancy pay. Notice of termination still applies.

Count headcount carefully before relying on either rule. According to the Commission, the count includes the dismissed employee, anyone dismissed at the same time, regular casuals, and employees of associated entities. For example, a 10-person company owned by a group with 30 staff is not a small business employer for these purposes.

What happens if the redundancy is not genuine?

If any of the three tests fails, the dismissal is not a genuine redundancy, and the employee can pursue an unfair dismissal claim. The Fair Work Commission then decides whether the dismissal was harsh, unjust, or unreasonable. If it was, the usual remedy is compensation, capped at the lower of 26 weeks’ pay or $95,050 from 1 July 2026.

To claim, the employee must be protected from unfair dismissal. According to the Commission, that means working for a national system employer, serving the minimum employment period, and earning under the high income threshold or being covered by an award or agreement. The minimum period is 6 months, or 12 months for a small business. From 1 July 2026, the high income threshold is $190,100.

The employee must also apply within 21 days of the dismissal taking effect. For how the Commission works out a payout, including the median award of 5 to 7 weeks’ pay, see our guide to unfair dismissal compensation. Separately, if the employee believes the redundancy hid an unlawful reason, they may bring a general protections claim instead.

What redundancy pay and notice do you still owe?

A genuine redundancy blocks an unfair dismissal claim, but it does not remove the employee’s entitlements. According to the Fair Work Ombudsman, an employee with at least one year of continuous service, working for an employer with 15 or more employees, is entitled to NES redundancy pay. They are also entitled to notice of termination or payment in lieu.

The NES redundancy pay scale, per the Fair Work Ombudsman, is:

Completed years of continuous service	Redundancy pay
One full year, but less than two years	4 weeks
Two full years, but less than three years	6 weeks
Three full years, but less than four years	7 weeks
Four full years, but less than five years	8 weeks
Five full years, but less than six years	10 weeks
Six full years, but less than seven years	11 weeks
Seven full years, but less than eight years	13 weeks
Eight full years, but less than nine years	14 weeks
Nine full years, but less than ten years	16 weeks
Ten full years of service or more	12 weeks

Redundancy pay is calculated at the base rate for ordinary hours, so it excludes bonuses, loadings, allowances, overtime, and penalty rates. Casuals, employees with less than 12 months’ service, and most small business employers fall outside the NES scale. Awards and agreements can set different amounts, so check the instrument first. Notice is separate, and the NES sets 1 to 4 weeks depending on service, as our guide to contract notice periods explains.

How should HR document a redundancy?

Document each test as you meet it. Record the operational reason the job is no longer needed, the consultation steps with dates and responses, the vacancies you checked across every associated entity, and the offers made. If a claim arrives, that file is your jurisdictional objection, and it is far stronger when it was built at the time.

A practical record for each affected employee includes:

• the business case naming the change and why the job is no longer required
• the consultation letters, meeting notes, and the employee’s responses
• a dated vacancy check across every entity, with any roles offered and the replies
• the termination letter, the notice given or paid, and the redundancy pay calculation.

Once restructures touch dozens of roles across several entities, those records scatter fast. Letters sit in one inbox, meeting notes in another, and the vacancy list in a spreadsheet nobody updated. If you want them held together, Worknice is a sensible option for Australian organisations of roughly 50 to 1,000 employees, because it stores documents and paperwork against each person across multiple entities. However, it does not provide legal advice, so a contested restructure still needs an employment lawyer.

Frequently asked questions

Can you claim unfair dismissal if you were made redundant?

Yes, but only if the redundancy was not genuine. Under section 389 of the Fair Work Act, a genuine redundancy cannot be challenged as unfair dismissal. If the job was still needed, required consultation did not happen, or redeployment was reasonable, the employee can apply to the Fair Work Commission within 21 days.

What is a genuine redundancy in Australia?

A genuine redundancy is one where the employer no longer requires the person’s job to be done by anyone because of operational changes, has met any consultation duty in the award or enterprise agreement, and could not reasonably redeploy the person within the business or an associated entity. All three must be true.

Is it a genuine redundancy if my duties were given to other people?

It can be. The test looks at whether the job is still needed, not whether the duties still exist. Redistributing duties among other employees, or outsourcing them, can still be a genuine redundancy, because the job itself has gone. Hiring someone else into essentially the same job is not.

Does an employer have to offer redeployment before making a role redundant?

An employer does not have to create a new role. However, a redundancy is not genuine if it would have been reasonable to redeploy the person into an available suitable role within the business or an associated entity. That can include lower paid roles and roles in other locations.

Do small businesses have to pay redundancy pay?

Most do not. According to the Fair Work Ombudsman, employers with fewer than 15 employees generally do not have to pay NES redundancy pay. Exceptions apply to businesses that become small through insolvency-driven downsizing and to industries with their own redundancy schemes. Notice of termination still applies regardless of business size.

About the author

Graham Martin is Co-founder of Worknice, an Australian HRIS built for mid-to-large organisations. He has spent more than a decade working with Australian People and Culture teams on HR systems, compliance, and payroll integration.

Related reading

• Unfair dismissal compensation: how the Fair Work Commission calculates a payout, and the 2026-27 compensation cap.
• Notice periods in employment contracts: the NES notice table and how to write a notice clause that holds up.
• Fixed term employment contract rules: why a fixed term ending is not a dismissal, and the limits on using one.
• HR document management: how letters, notes, and signed paperwork are kept against each employee.

Sources

All sources retrieved 11 October 2026.

Fair Work Commission

1. Fair Work Commission, Unfair Dismissals Benchbook, “What is a genuine redundancy?”. Last updated 10 December 2021: https://www.fwc.gov.au/what-genuine-redundancy
2. Fair Work Commission, Unfair Dismissals Benchbook, “Consultation obligations”. Last updated 9 December 2024: https://www.fwc.gov.au/consultation-obligations
3. Fair Work Commission, Unfair Dismissals Benchbook, “Redeployment”. Last updated 11 December 2024: https://www.fwc.gov.au/redeployment
4. Fair Work Commission, Unfair Dismissals Benchbook, “What is the Small Business Fair Dismissal Code?”: https://www.fwc.gov.au/what-small-business-fair-dismissal-code
5. Fair Work Commission, Nalevansky v Thought Equity Motion Inc [2010] FWA 3707, 12 May 2010: https://www.fwc.gov.au/documents/decisionssigned/html/2010fwa3707.htm
6. Fair Work Commission, “Compensation for unfair dismissal”. Last updated 1 July 2026: https://www.fwc.gov.au/job-loss-or-dismissal/unfair-dismissal/possible-results-unfair-dismissal-claims/compensation-unfair
7. Fair Work Commission, “Who the law protects from unfair dismissal”. Last updated 14 December 2023: https://www.fwc.gov.au/job-loss-or-dismissal/unfair-dismissal/about-unfair-dismissal/who-law-protects-unfair-dismissal

Fair Work Ombudsman and legislation

1. Fair Work Ombudsman, “Redundancy”. Content updated 28 August 2026: https://www.fairwork.gov.au/ending-employment/redundancy
2. Fair Work Ombudsman, “Redundancy pay”. Content updated 28 September 2026: https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay
3. Fair Work Ombudsman, “Who doesn’t get redundancy pay”. Content updated 19 March 2026: https://www.fairwork.gov.au/ending-employment/redundancy/who-doesnt-get-redundancy-pay
4. Federal Register of Legislation, “Fair Work Act 2009”. Compilation No. 73, compilation date 7 July 2026, section 389: https://www.legislation.gov.au/C2009A00028/latest/text