Ethical redundancies continue to be missing from the Australian workforce

Telling staff that they have been made redundant is one of the most difficult parts of anyone’s job. But what’s consistently lacking from these hard conversations is human compassion.

All too often, there are glaring examples of a genuine lack of concern or care being shown by major companies forced to let people go.  

Think about it for a second. A person’s identity is wrapped up in what they do for work. After introducing ourselves in a social setting, the next thing we usually share about ourselves is what we do for work.  

When Director of The Ethics Centre’s Ethics Alliance, Cris Parker called out the need for a rethink of redundancy done #ethically on LinkedIn recently, plenty of workers chimed in about their own experiences of tragic redundancy stories.  

One senior manager revealed he wasn’t even paid a redundancy when being laid off by an Australian company some years ago. Management got around this because the law states that they don’t have to pay redundancy if there are less than 15 employees in the company.  

He admits that he still struggles with what happened to him all these years later and wants to see the law changed, admitting that the process was unethical, resulting in people left unsupported and left to struggle financially.   

The closed door meeting you didn’t expect

No matter how committed you are to your role, suddenly being made redundant can be an emotionally crippling experience.   

But it’s all too common. Media reports reveal that 2023 has been a year of mass redundancies as profits have been squeezed. Nearly 23,000 Australians have been laid off in reported redundancy rounds this year in response to rising interest rates and stubbornly high inflation.  

But the real number of actual redundancies is likely to have been much higher as employers only need to notify Services Australia when they lay off more than 15 staff members.  

Among the cuts has been KPMG, which announced 200 redundancies in February. Star Entertainment laid off 500 staff in May, while Telstra cut nearly 500 staff in July. The big banks have also been slashing jobs, collectively cutting more than 2000 jobs, according to media reports. There are also examples of companies pushing for staff to leave if they don’t return to the office. 

Back in the pandemic, employers were more compassionate in many ways. We saw into our boss’s homes and personal lives and heard about the challenges they were facing. Bonds that haven’t been seen before in the workplace were formed.

At the time, a huge 99% of workers felt that they were working for an empathetic leader in the pandemic, according to KornFerry statistics. This is twice as high than pre-Covid, and it has shaped a new normal that employers need to recognise, even though they may now be facing financial pain amid a much more complex economic time.  

Redundancies announced over the lunchroom speaker

Qantas Airways was among the many companies to downsize teams in the wake of Covid, as work was in short supply. In a bid to save a buck, Qantas Airways replaced the ground handling function with outsourced workers, which the Federal Court has since found to be illegal because the airline failed to engage in proper consultation and communication.  

In a particularly brutal approach, Qantas reportedly told the 1700 workers about their upcoming dismissal via a lunchroom speaker with no prior warning, which doesn’t demonstrate empathy or compassion. 

The case reminds Mollie Eckersley, ANZ operations manager for BrightHR of the US-based Better.com.au CEO who made headlines for making 900 of his staff redundant via an impersonal Zoom call.  

She’s the first to accept that making redundancies can’t always be avoided in a bid to keep businesses viable, but cautions that how redundancies are announced to staff can have lasting ramifications on a person.  

Approaching job cuts with a transparent, open and empathetic perspective will assist what is already a difficult experience. If not done well the negative impact on the culture is longstanding.  

“The Qantas case has highlighted and served a cautionary tale for other businesses considering redundancy plans for its employees. There’s a clear need for robust records – otherwise businesses risk legal action and irreparable damage to reputation. Specific steps must be followed to ensure the process is fair and legal,” says Eckersley.  

The rules state that the employer must initiate a meeting with the employee to discuss proposed changes, and that in that meeting, the staffer should be allowed to express concerns, provide feedback and suggest alternatives to redundancy.  

But what about the ethical part of this process? People need to be treated with compassion, and giving the employee reasons for letting them go can help soften the blow.  

Asking who might like to take a redundancy can be a good first step, because some employees might already have one foot out the door.  

Organisations need to ensure they are acting in line with their values. Integrity, care and ethics need to be embedded into the process of making people redundant, particularly when those difficult decisions are made and there are very real human consequences.  

This can be done by ensuring that your organisation has a purpose that can inspire those who remain, and be transparent about the reasons for the redundancy, rather than letting them wonder if they might be next.  

A great deal of consideration also should be given to the timing of a redundancy announcement. Alternatives to redundancy, such as offering staff shorter working weeks or even reducing pay for a prescribed period of time, should also be considered.  

Growing unemployment, mental health issues and the treatment of workers isn’t being addressed by the largest companies using redundancy as a lever amid economic woes, and our government seems intent on allowing the status quo to continue.  

We’re all human beings, after all.