What is redundancy and am I entitled to redundancy pay?
Redundancy occurs when your job is no longer needed. You are generally entitled to redundancy pay in Australia if covered by the National Employment Standards (NES), a modern award, or an enterprise agreement, provided your employer isn't a small business and you meet service requirements.
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How it works in practice
What is Redundancy?
Redundancy happens when an employer decides that they no longer need a particular job to be performed by anyone. This can occur for various reasons, such as technological changes, a downturn in business, restructuring, or the relocation of operations. It is a decision about the job itself, not about the employee's performance.
Entitlement to Redundancy Pay
In Australia, employees may be entitled to redundancy pay under the National Employment Standards (NES), a modern award, or an enterprise agreement. The NES sets out the minimum entitlements to redundancy pay for eligible employees based on their period of continuous service with the employer. Generally, full-time and part-time employees are eligible after 12 months of continuous service, unless specific exceptions apply. The amount of redundancy pay is calculated based on the employee's length of service.
Important exceptions
Not all employees are entitled to redundancy pay. Small business employers (fewer than 15 employees) are generally exempt from paying redundancy under the NES. Employees with less than 12 months of continuous service, casual employees (unless they are regular and systematic casuals with an expectation of ongoing employment), apprentices, and employees on fixed-term contracts that end naturally may also not be entitled. Additionally, if an employee is offered suitable alternative employment by the employer or an associated entity, or if the employer transfers the business, they might not receive redundancy pay. Serious misconduct can also negate this entitlement.
What you should do now
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Understand the definition of redundancy and confirm your job is genuinely redundant, not a dismissal for other reasons.
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Check your employment contract, modern award, or enterprise agreement for specific redundancy clauses and entitlements.
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Calculate your potential redundancy pay entitlement based on your length of continuous service as per the National Employment Standards (NES).
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Communicate formally with your employer to discuss your redundancy package, including notice periods and any outstanding entitlements.
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Seek independent advice from the Fair Work Ombudsman, a union, or an employment lawyer if you have concerns about your entitlements or the redundancy process.
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