How much redundancy pay am I entitled to in Australia?
Eligible employees in Australia are entitled to redundancy pay based on their continuous service with an employer, as set out in the National Employment Standards (NES). The amount is typically calculated as a number of weeks' pay, varying with your length of service.
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How it works in practice
Understanding Redundancy Pay
Redundancy pay is an entitlement for eligible employees whose job is no longer required due to operational changes within a business. This can occur due to technological changes, a downturn in trade, a restructure, or the business closing. The primary legislation governing redundancy pay is the National Employment Standards (NES), which applies to most employees in Australia.
Eligibility and Calculation
To be eligible, an employee must have completed at least 12 months of continuous service with their employer and work for a business that is not classified as a small business employer (fewer than 15 employees). The amount of redundancy pay is calculated based on the employee's period of continuous service, as outlined in the NES. For example, 1 to 2 years of service typically equates to 4 weeks' pay, increasing to up to 16 weeks' pay for 9 to 10 years of service. This is usually paid at the employee's base rate of pay for their ordinary hours of work.
Important exceptions
Several key exceptions limit an employee's entitlement to redundancy pay.
Small businesses (fewer than 15 employees) are generally exempt from paying redundancy pay under the NES. Casual employees are typically not entitled to redundancy pay. Additionally, if an employee is dismissed for serious misconduct, if their fixed-term contract naturally expires, or if they refuse an offer of suitable alternative employment within the business, they may not be eligible. Redundancy pay also doesn't apply if the business transfers to a new owner and the employee is offered comparable employment with the new employer.
What you should do now
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Check your employment contract, modern award, or enterprise agreement for specific redundancy clauses beyond the NES.
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Calculate your potential redundancy entitlement based on your length of continuous service using the Fair Work Ombudsman's online tools.
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Request clear written confirmation from your employer regarding the reason for redundancy and your full entitlements.
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Ensure all outstanding entitlements, including annual leave, long service leave, and notice period, are included in your final pay.
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Seek advice from the Fair Work Ombudsman, your union, or an employment lawyer if you have concerns about your redundancy or entitlements.
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