Human rights lawyer warns on hidden risk in common redundancy process

A human rights lawyer is warning employees of the hidden cost in agreeing to go quietly from a company in exchange for a bigger payout cheque — a practice used by one of the big four professional services firms in a round of redundancies. Documents sighted by The West Australian show said firm was offering “enhanced redundancy packages” as droves of employees were axed from the business in the past 12 months. In return for varying rates of extra pay on top of their statutory entitlements, employees were expected to sign a one-way confidentiality deed releasing their employer from any claims, complaints or liabilities covering the entirety of their employment with the company as well as the redundancy process. The process itself was also ordered by the company to be kept under strict confidentiality, and employees taking the additional payments were bound from making any adverse statements about their former employer. Human Rights Law Centre senior lawyer Regina Featherstone says this is something she sees frequently in her practice. For the employer it ensures a clean break on commercial terms, but Ms Featherstone has warned the cost to employees can be accidentally signing away their rights to legal recourse down the track. “I think that power imbalance at the start is really important to recognise. What might be normal for a business isn’t normal to an individual,” she told The West Australian. “Immediately an employee might become suspicious or feel uneasy about what’s presented to them. “You can see it from the employer’s side of things. They want … to make sure that they’re not going to be hit with any claims in the future, but that puts the employee in a pretty tough position to try and recognise whether they have any outstanding claims for discrimination or underpayments, or those sorts of claims against the employer that they might accidentally be signing away.” Responding to questions about its use of the deeds, a spokesman for the company said nearly all of the staff offered enhanced redundancy packages had taken them. With the responsibility ultimately on the employee, Ms Featherstone said it was crucial to understand any document that gets signed. “It essentially means that you wouldn’t be able to pursue them in the future for a claim that you might realise you have,” she said. She said underpayment was a common example. “If you sign an agreement with an exhaustive release, releasing the employer from every claim associated with the employment you may actually have no legal recourse available to you to be able to recover those monies,” she said. “The ideal situation is that both parties are coming to it on equal footing, that they’re empowered to make decisions that relate best to their experiences and needs.”