Dismissal of an employee because of the operational requirements of the business usually occurs when there is no longer any work for the employee or the employee's position no longer exists.

It is tempting for the employer to artificially create a redundancy situation simply to get rid of an unwanted employee. Often this occurs because the employer is unsure what steps to take to dismiss the employee correctly or it does not wish to delay the dismissal process by adopting correct procedures.

Where an employee is dismissed on redundancy grounds and the employer sets out to employ a new employee to take up the position then this is proof that the redundancy is not genuine.

Redundancy is broadly caused by :

i.  Technological Change;
ii.  Economic factors, i.e. Loss of Large Contract; Recession;
iii.  Business Restructuring or Sale

It is also to be noted that in Australia where an employer decides to dismiss 15 or more employees for an economic, technological or structural reason then the employer must notify the Australian Centrelink of such group retrenchments. The Commission has certain powers to act in such situation.