Genuine redundancy occurs when an employer decides they no longer require an employee’s job to be performed by anyone, and terminates their employment. In such circumstances, an employer is required to give the employee proper notice of termination as well as redundancy or severance pay.

Notice of termination and Redundancy pay form part of the National Employment Standards (NES). The NES applies to all employees covered by the national workplace relations system, regardless of any award, agreement or contract. However, an award or enterprise agreement may specify additional obligations which the employer must comply with in relation to redundancy.

An employer must provide an employee with written notice of termination. The NES establish the minimum notice period or payment in lieu of notice that an employer must give to an employee to terminate their employment. These apply to all employees, other than casuals. The minimum notice period will depend on the employee’s period of continuous service.

Period of Continuous Service Minimum Notice Period
1 year or less 1 week
More than 1 year, but less than 3 2 weeks
More than 3 years, but less than 5 3 weeks
More than 5 years 4 weeks

The amount of redundancy pay an employee is entitled to, is also based on their period of continuous service with their employer. Continuous service is the length of time in which the employee was employed by the employer, excluding unpaid leave.

Period of Continuous Service Redundancy Pay
At least 1 year but less than 2 4 weeks
At least 2 years but less than 3 6 weeks
At least 3 years but less than 4 7 weeks
At least 4 years but less than 5 8 weeks
At least 5 years but less than 6 10 weeks
At least 6 years but less than 7 11 weeks
At least 7 years but less than 8 13 weeks
At least 8 years but less than 9 14 weeks
At least 9 year but less than 10 16 weeks
At least 10 years 12 weeks

Redundancy pay is paid at the employee’s base pay rate for ordinary hours worked. An employee’s base rate of pay is the pay rate they receive for working their ordinary hours. It does not include incentive based payment and bonuses, loadings, monetary allowances, over time or penalty rates.

Some employees are not entitled to redundancy pay. These include employees whose continuous service with the employee is less than twelve months, employees employed for only a set period of time, task or season, employees terminated because of misconduct, casual employees, trainees engaged only for the length of the training arrangement, apprentices, or small business employees (an employer who employees fewer than 15 employees).

Even if an employee is entitled to redundancy pay, an employer can still apply to reduce the amount if the employer has found other acceptable employment for the employee or cannot afford the full redundancy amount.

When a business becomes insolvent or bankrupt, employees are also considered to have been made redundant. In such situations, eligible employees can access the Fair Entitlements Guarantee (FEG) to help them get their unpaid entitlements.

If you have been made redundant, Antunes Lawyers can help you understand and access everything you are entitled to.

Talk to one of our expert lawyers today.