See Fair Work Act 2009 s.389(1)(b)
The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements (which they often do) to consult about redundancy.
See Fair Work Act s.47
A modern award applies to an employee when it:
A modern award does NOT apply to an employee at a time when the employee is a high income employee. As a result, modern award consultation obligations do not apply to high income employees.
This does not affect eligibility for an unfair dismissal remedy.
See Fair Work Act s.52
An enterprise agreement applies to an employee when it:
There is no legislative requirement to consult about the redundancy before a decision is made to make an employee redundant.
The Fair Work Ombudsman can assist you with enquiries about the application of modern awards and enterprise agreements. For assistance, contact the Fair Work Ombudsman on 13 13 94 or www.fairwork.gov.au.
It will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
If an employer was obliged to consult and fails to do so, there cannot be a genuine redundancy.
The process for selecting employees for redundancy is not relevant to whether the dismissal was a genuine redundancy or whether there was a valid reason for dismissal based on capacity. However an unlawful selection process may be relevant to a claim under the general protections provisions of the Fair Work Act or under state or federal anti-discrimination laws.
Criteria in s.389 of the Fair Work Act which have not been met, such as the requirement to consult, can be taken into account in the Fair Work Commission's consideration as to whether the dismissal was harsh, unjust or unreasonable as part of s.387(h) of the Fair Work Act, being 'any other matters that FWC considers relevant'.
A failure to consult with employees about redundancy can mean that the Commission may find that it was not a case of genuine redundancy. However, in circumstances where 'consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change', the failure to consult may not be so strongly considered by the Commission in determining whether it was an unfair dismissal.
Consultations should be meaningful and should be engaged in before an irreversible decision to terminate has been made.
'Consultation is not perfunctory advice on what is about to happen ... [c]onsultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker.'
'The purpose of a consultation clause is to facilitate change where that is necessary, but to do that in a humane way which also takes into account and derives benefit from an interchange between worker and manager.'
The following was observed by Sachs LJ in Sinfield v London Transport Executive:
Consultations can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. Any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at the formative stage of proposals – before the mind of the executive becomes unduly fixed.
 Explanatory Memorandum to Fair Work Bill 2008 at para. 1550.
 ibid., at paras 47‒48.
 See Maswan v Escada Textilvertrieb T/A ESCADA  FWA 4239 (Watson VP, 8 July 2011) at para. 39.
 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company, Print R0234 (AIRCFB, Ross VP, MacBean SDP, Deegan C, 21 December 1998) at paras 78–80, [(1998) 88 IR 202]; cited in Steele v Ennesty Energy Pty Ltd T/A Ennesty Energy  FWA 4917 (Jones C, 21 June 2012) at para. 20.
 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodafone Network Pty Ltd, PR911257 (AIRC, Smith C, 14 November 2001) at para. 25.
 ibid., 558.