Can older staff be made redundant to make room for staff eligible for JobMaker?

HR, lead, JobKeeper, human skills

With the newly announced JobMaker scheme incentivising hiring young people under 35, many are concerned that older workers may be disadvantaged. Some critics point to a scenario where older staff are made redundant, only to be replaced by younger workers eligible for JobMaker. But is this actually legal?

What is JobMaker?

In an effort to boost employment, the JobMaker Hiring Credit provides monetary incentives to businesses to hire people currently on JobSeeker aged between 16 and 35 years old. These new employees must be offered at least twenty (20) hours of work.

Businesses will receive $200 a week when hiring an eligible worker aged 29 or under and $100 a week when hiring an eligible worker between 30 and 35 years old. New jobs created until 6 October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created.

Will employers be incentivised to terminate staff who aren’t eligible for Jobmaker?

All of this begs the question, will employers be legally entitled to make a position redundant only to turn around and hire a younger person for the same or similar position? Certainly, there is a strong incentive to do so with employers potentially standing to gain thousands of dollars in government benefits.

If an employer opts to go down this path, what are the risks? And is it actually legal?

What are the legal considerations employers must make when making staff redundant?

If an employer makes a position redundant correctly and in accordance with the present law, they will not be in jeopardy of having committed an actionable offence. Therefore, it is extremely important that the classification of a position as redundant, be done properly and in accordance with all of the legal requirements.

A position can be found redundant if the following circumstances exist:

  • The employer no longer needs a particular job to be done by anyone.
  • The employer becomes insolvent or bankrupt.

In the event that the employer makes a position redundant, and then rehires a younger person via the JobMaker program to onboard and do the same job that was just made redundant, it is possible that this could be an actionable offence. The claim holder would be the person who was told their job was redundant. The claim would be that the employer turned around and hired someone younger to do the same job that the employer insisted was redundant.

However, in the event that an employer makes a job redundant and then hires a younger person (via JobMaker) to do a job that may be slightly similar to the redundant position, but includes several different or additional responsibilities, the issue of the new position being illegal becomes less viable. To arrive at this conclusion, the Court would most likely complete an analysis of the two positions. If the Court found that the new job was essentially a different job, then the laws regarding redundancy probably would not preclude the new job, or the new employee, from being hired via JobMaker.

It is highly recommended that if you are an employer and you do need to make positions redundant for economic reasons, that upon rehiring you ensure that you are not simply adding a younger person to do the same job you just categorised as redundant. Instead, be sure that the new position does have significant differences from the position which you claim you no longer need to be done by anyone.

Rolf Howard, Managing Partner, Owen Hodge Lawyers