Redundancies…risky business

How do organisations make sure redundancies don’t violate psychosocial hazard laws/rights for the surviving employees?

The budget delivered a surplus for the first time in 15 years. It did outline a future that does appear to acknowledge economic headwinds over the years to come, although optimistically predicts no recession. As businesses already feel the pinch of the gravy train of COVID handouts drying up, colliding with rising costs of business, redundancy is a word being heard more and more in the domestic and international business ecosystems. With an increasing number of Australian businesses facing the prospect of insolvency, redundancy is the route some organisations are pursuing.  

Unfortunately, redundancies are a potential reality of business and it’s not always a lack of workflow and sales that can cause the need to reduce staff numbers. Rising inflation and general costs of doing business can mean companies have commitments to clients, yet the cost of those commitments is eating into profitability. The idea of some redundancies is to try and achieve better profits from the current work being completed.

As such, those that are left are being asked to complete a greater number of duties to compensate for those who have been removed from the payroll. This expansion of current duties requiring greater hours of people’s time inevitably increases employee stress, burnout, and rates of poor mental health. The work would be considered psychologically dangerous as it forms a hazard within an employee’s job design. Prior to 2022, being caught with this additional burden was often referred to as “survivor syndrome”.

Prior to the 2022 psychosocial hazard laws being introduced across many Australian states, this is a practice that would probably have been viewed at worst unethical, at best “just what we need to do”. These new laws, however, mean that the practice is now illegal. A business simply cannot pile more work on a person’s plate without considering the likely psychological hazards that come with increased work hours, inadequate training to complete the tasks assigned, and blurring of responsibilities.

So how does a business navigate a round of redundancies, without leaving themselves vulnerable to violating the psychosocial hazard laws of their state?

  1. Likely everything in business, prior, preparation, prevents, poor, performance (The 5P’s principle). Most organisations are really good at putting in place systems and supports for those being let go, but rarely think about what the impact will be for those who are left. Spend time planning not just the redundancy journey for those leaving the business, but also what the work is going to look like for those left.
    1. Make sure you have plans to disperse the workload across the remaining workforce to limit the overall increase for any one particular individual or team.
    1. Make sure your leadership/management team redisperse that work appropriately. Ensure that individuals are assigned work that speaks to their experience and competencies. Make this a conscious decision, and if people are having to take on new responsibilities ensure that they are appropriately trained to do so, and ideally try and align it with skills and exposure that helps to deliver future growth to that individual.
  • Have a plan to move through the disruptions. The laws recognise that some psychosocial hazards are unavoidable, and managing those risks is simply the best an organisation can do. Redundancies should (if conducted appropriately) fall into this category. Managing inevitable risks requires organisations to appropriately assess the frequency, severity, and duration of particular risks employees face. In response to the inevitable shake up and disruption caused by a round of redundancies, an organisation should have protocols and answers in place to the below questions to minimise the job design hazard
    • Frequency: If periods of increased workload (job design) are inevitable, how do we limit the number of times this will occur for a single individual or team?
    • Severity: What is the plan to limit how much extra work an individual employee or team is going to be required to do?
    • Duration: What is the plan to contain the amount of necessary additional hours/responsibilities an employee or team is going to have to endure? And what protocols are in place to ensure those employees are given (and openly encouraged to utilise) the appropriate opportunity to recover from a period of extended workload/duties?

Appropriately considering and planning around these two overarching points during the planning phase of a redundancy round should provide an organisation the framework from which to ensure the redundancy doesn’t turn into a violation of psychosocial hazard laws, and more importantly, prevent injury for the employees who remain.

Disruption and stress are inevitable parts of a redundancy. You don’t need to completely remove it, however, planning and managing can make it a better experience for all involved.


Oliver Brecht, Managing Director of Veretis Group