Last Updated on 19/09/2025 by Damin Murdock
Redundancy is one of the more complex areas of employment law in the hospitality sector. With the industry subject to frequent structural changes such as new ownership, renovations, seasonal closures, or downturns in trade, employers may need to reduce staff numbers. However, a redundancy will only be considered genuine if it meets the legal test under section 389 of the Fair Work Act 2009 (Cth) (the Act). This article explains what a genuine redundancy is and how hospitality employers can comply with the law.
Requirements To Establish Genuine Redundancy
A dismissal is a genuine redundancy if three conditions are satisfied.
First, the employer no longer requires the employee’s job to be performed by anyone because of operational changes. Examples include closing a restaurant, outsourcing cleaning or security, or introducing new technology that automates certain roles.
Second, the employer has complied with any consultation obligations in the applicable modern award or enterprise agreement. Under the Hospitality Industry (General) Award 2020, this means consulting with employees and their representatives before making redundancies, providing information about the changes, and considering employee feedback.
Third, it must not have been reasonable to redeploy the employee within the employer’s business or any associated entities. Redeployment involves assessing whether there are other suitable roles available, even at a lower level or in another location.
If these conditions are not met, the dismissal is not a genuine redundancy and may be challenged as an unfair dismissal. For example, dismissing a waiter for redundancy and then hiring another waiter shortly after is not genuine. Similarly, failing to consult with staff before announcing redundancies can invalidate the process.
Practical Steps for Compliance
- documenting the operational reasons for redundancy,
- consulting with employees early and genuinely, considering redeployment options across the business, and
- issuing clear written communication outlining the process.
Employers should also calculate redundancy entitlements correctly, taking into account the employee’s length of service and any applicable exclusions under the Act.
Key Take Aways
Genuine redundancy requires more than just saying a role no longer exists. It requires compliance with strict legal tests around operational need, consultation, and redeployment. Employers who follow the process correctly can avoid costly unfair dismissal claims and maintain trust during difficult times.
Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
