Learn the answers to the most frequently asked questions that we receive about redundancy and redundancy pay.
What is a genuine redundancy?
A redundancy takes place where an employee’s role is eliminated. The key to a genuine redundancy is the disappearance of a job or position. For example, a genuine redundancy might take place where:
- The job no longer exists;
- The employer decides to eliminate the employee’s role or position as part of a restructure, and to redistribute the jobs or tasks associated with that role or position to other employees in different roles and positions.; and
- The job is replaced with a new position that involves some, but not all, of their former duties.
Dismissal will not be a genuine redundancy where the employer hires someone else to do the original job, has not followed requirements to consult with employees, or could reasonably have redeployed the employee to another job within the employer’s enterprise.
What is redundancy pay?
The Fair Work Act 2009 (Cth) now includes redundancy pay as a minimum entitlement under the National Employment Standards (‘NES’). Accordingly, the obligation to make such a payment is triggered whenever employment is terminated because of a redundancy.
How is redundancy pay calculated?
The scale of payment for a redundancy starts at 4 weeks’ pay for a worker with one year’s service, and raises to 16 weeks’ pay for workers of between 9 and 10 years of service. However, once a worker has 10 years of service, the minimum payment falls down to 12 weeks’ pay. This reflects the fact that in most jurisdictions an employee with 10 years of service is entitled to long service leave of 2 months.
Am I entitled to redundancy pay?
To be entitled to redundancy pay you must have been employed for more than 12 months, and the employer must have more than 15 employees. Other provisions may apply if you are covered by a modern award or enterprise agreement.
What entitlements should I be paid on dismissal?
- Outstanding Wages;
- Redundancy pay;
- Notice payment;
- Leave entitlements; and
- Any other payment as agreed with your employer being, commission and/or bonus.
What are my rights to consultation when being made redundant?
All awards and registered agreements will have a consultation process in place for redundancies that sets out certain obligations that the employer must undertake as soon as possible after the decision to make changes to the business. These obligations are contained in the Fair Work Act 2009 (Cth) and include:
- Notifying the employees who may be affected by the proposed changes;
- Providing the employees with information about these changes and their expected effects;
- Discussing steps taken to mitigate adverse effects on the employees; and
- Considering ideas or suggestions made by employees about the changes.
Essentially, a consultation needs to provide employees with a genuine opportunity to learn of the proposed changes and to influence the decision.
Can I be redeployed into a different role with my employer?
Employers are obliged to redeploy employees where it would have been reasonable to do so in all the circumstances. Any vacant role which the employee is qualified to perform should be open for consideration, regardless of whether the job is in the same location, at a different level of seniority or less well remunerated.
What should I do if I believe my redundancy was not genuine?
If you have been made redundant and you think you were dismissed because of discrimination, a reason that is harsh, unjust or unreasonable or for some other reason you have 21 days from the day after you were dismissed to lodge an unfair dismissal application or a general protections application with the Fair Work Commission.
Do you have a question?
If you have a question that isn’t answered on this list, you can send your query to us through the contact form below and we’ll add it to the list!
Being made redundant is a stressful situation. If you think your redundancy is not genuine and your employer is trying to ‘manage you out’ or that you haven’t been given the required notice and redundancy pay, please don’t hesitate to contact us on 02 9331 0266 to discuss your rights.