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5 Common Redundancy Myths

in Employment Law by Aron Neilson on
5 Common Redundancy Myths

Rumour has it that you might already believe these common redundancy myths to be true. We’re addressing the five common myths so you know how to distinguish fact from fiction. 

Myth #1: “I can be made redundant if my employer is not satisfied with my performance.”

Fact: You cannot be made redundant if your performance is unsatisfactory. A redundancy can only occur in circumstances where your role is no longer required to be performed by anyone.

If your employer is unsatisfied with your performance they should engage in a performance management procedure under the relevant contract, policy or agreement or at least act in a fashion that affords you procedural fairness.    

Myth #2: “My employer can decide to pay me what they like if I am made redundant.”

Fact: The National Employment Standards contained within the Fair Work Act stipulate minimum amounts that are payable to an employee when they are made redundant.

These amounts are as follows:

Redundancy Pay Period

 

Employee's period of continuous service with the employer on termination

Redundancy pay period

1

At least 1 year but less than 2 years

4 weeks

2

At least 2 years but less than 3 years

6 weeks

3

At least 3 years but less than 4 years

7 weeks

4

At least 4 years but less than 5 years

8 weeks

5

At least 5 years but less than 6 years

10 weeks

6

At least 6 years but less than 7 years

11 weeks

7

At least 7 years but less than 8 years

13 weeks

8

At least 8 years but less than 9 years

14 weeks

9

At least 9 years but less than 10 years

16 weeks

10

At least 10 years

12 weeks

 

 

 

 An employer cannot contract out of the provisions of the National Employment Standards. Keep in mind that the NES are minimum terms and conditions and you might actually be entitled to more.

Myth #3: “My employer does not have to pay me a redundancy payment if I find another job.”

Fact: An employer has an obligation to pay the minimum redundancy payments outlined above irrespective of whether you find an alternative role shortly after being made redundant.  

The only exception to this is if the employer secures suitable alternative employment for you and then they may apply to the Fair Work Commission to be relieved of the obligation to pay you redundancy pay.

Myth #4: “If I am the most recently employed person in my workplace, where a restructure occurs I will be the first person who is made redundant.”

Fact: Redundancy processes vary greatly amongst employers and there is no “one-size-fits-all” approach. Accordingly, there is no blanket rule that the last employee who was employed, will be the first employee to be made redundant during a restructure.

Myth #5: “Voluntary redundancies must be offered before forced redundancies are imposed.”

Fact:   A company does not have an obligation to offer voluntary redundancies during restructure. Whilst this is often considered a wise first step in the process because it gives employees a sense of control in the restructure process, it is not a mandatory step. An employer may decide that proceeding with forced redundancies is preferable.

We’ve highlighted the most common myths in this post, but, when it comes to employment law we understand that not all circumstances are the same. To discuss your employment law matter with our team, Start a free enquiry now.