How to Make a Role Redundant (Without Landing in Hot Water with Fair Work)

Hello and welcome to Episode 323 of The People Powered Business Podcast.

Have you reached the point where you know a role in your business no longer makes sense, but the thought of making someone redundant feels overwhelming? Maybe business has changed, technology has improved how work gets done, or you simply can’t justify carrying a salary for a role that’s no longer needed.

The problem is, one wrong step in a redundancy process can land you in serious trouble with Fair Work, and that’s a risk no small business owner wants to take.

I wanted to talk about this because I’m seeing so many businesses going through change right now. Some are restructuring because of economic pressure, some are evolving because of growth, and others are adapting to the impact AI is having on teams and workloads.

Redundancy is often treated like a scary or taboo topic, but the reality is that restructuring your team can sometimes be the most practical and responsible thing you can do as a business owner. The key is making sure you do it properly and legally.

In this episode, I break down exactly what a genuine redundancy actually is under the Fair Work Act, and more importantly, what it is not. I explain the consultation process that many employers completely overlook, why redeployment matters, and when small businesses may not have to pay redundancy pay at all. I also share the biggest mistakes that lead to unfair dismissal claims, including using redundancy to avoid performance management conversations and failing to document the process correctly. If you’ve ever worried about getting redundancy wrong, this episode will help you understand the practical steps that protect both your business and your employees.

In this episode we cover:

• What makes a redundancy “genuine” under Fair Work
• The consultation process employers are legally required to follow
• When redeployment must be considered before ending employment
• Whether small businesses have to pay redundancy pay
• The most common redundancy mistakes that trigger unfair dismissal claims

Links & Resources:

• Join People Powered HR: https://www.peoplepoweredbusiness.com.au/pphr
• DM me on Instagram @kristy.lee.billett
• Connect with me on LinkedIn: https://www.linkedin.com/in/kristyleebillett/
• Email me at [email protected]
• Book a 15-minute clarity call: https://calendly.com/kristyleebillett/chat

What this episode covers

• Making a role redundant can feel incredibly stressful for small business owners, especially when there’s uncertainty around Fair Work obligations, consultation requirements and redundancy pay. This episode explains what a genuine redundancy actually means, when restructuring is appropriate, and how to avoid the costly mistakes that often lead to unfair dismissal claims.
• It’s particularly relevant for businesses navigating change, growth, economic pressure or the impact of AI on team structures. By the end of this episode, listeners will understand the key legal and practical steps involved in managing a redundancy process properly.

Key insight from this episode

• Redundancy is about the role, not the person. If a business uses redundancy to avoid performance management or skips proper consultation and redeployment considerations, the redundancy may not be considered genuine under Fair Work, leaving the business exposed to unfair dismissal claims and significant financial risk.
• What you'll take away
• Understand the three conditions that make a redundancy legally genuine
• Know what meaningful consultation with employees actually looks like
• Be able to identify when redeployment options must be considered
• Learn when small businesses may be exempt from paying redundancy pay
• Recognise the common mistakes that put employers at risk with Fair Work