Redundancy entitlement

A redundancy may occur when a business no longer requires a position to be performed by any employee of the company anymore.

There can be many different reasons why a redundancy may occur. For example, a downturn in the industry or the customers of a business, the permanent closing of an office/work site or similar.

Regardless of the reason for the redundancy, it is a stressful period in a person's life and your legal rights aren’t always clear.

Is my redundancy genuine?

When looking to make a position redundant, employers need to ensure it is a genuine redundancy scenario. Otherwise if it is not a genuine redundancy, the employee may be able to file an unfair dismissal claim.

The Fair Work Act 2009, states a redundancy occurs when:

• The employer does not require anyone to do the person’s job due to a change in structure or operations; and
• The employer has complied with the obligations detailed by modern awards or the enterprise agreement.

A redundancy is not deemed genuine if:

• The employee could have been reasonably reassigned into another role in the employer’s enterprise, or any other associated entity.
• The employer has not explored options other than redundancy, such as redeployment to other parts of their business.
• The employer has hired another person to do the same job.
• The employer has not consulted with the employee or followed the due process that is detailed by modern awards.

Unfair dismissal

If you suspect your redundancy isn‘t genuine, you may be able to file an unfair dismissal claim.

An unfair dismissal is when an employee is dismissed by their employer, and you consider that the dismissal is unfair.

Learn more about unfair dismissals.

You may file an unfair dismissal claim if:

• the person has been dismissed (Within 21 days of the dismissal taking effect);
• the dismissal was harsh, unjust or unreasonable; or
• the dismissal was not a case of genuine redundancy.

Do you think you have actually been dismissed for an unlawful reason?

Even in circumstances of redundancy, you may be able to file an application alleging a contravention of the general protections provisions in the Fair Work Act if, one of the reasons for the termination of your employment was an unlawful or prohibited reason. Some unlawful reasons to dismiss an employee include, to name a few:

• that you have insisted upon an entitlement under an Enterprise Agreement or Award that applies to you or under the Fair Work Act;
• that you made a complaint or made inquiries in relation to your employment;
• your temporary absence from work due to illness or injury;
• that you are or are not a member of a union;
• that you are acting or have acted as an employee representative;
• that you have initiated legal proceedings against the employer;
• your race, colour, sex, sexual orientation, age disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin; and
• that you have taken maternity or parental leave.

Redundancy laws and National Employment Standards

Redundancy payment forms part of the National Employment Standards (NES). The NES apply to all employees covered by the national workplace relations system, regardless of any Award, Enterprise Agreement or employment contract. Learn more.

Redundancy entitlements

Employees must receive a redundancy payment based upon their continuous period of service with their employer. This amount 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, but does not include the following:

• incentive-based payments and bonuses
• loadings
• monetary allowances
• overtime or penalty rates
• any other separately identifiable amounts.

The below is the minimum NES redundancy payment you may be entitled to. You may be entitled to a more generous redundancy payment if your Award, EBA or employment contract allows it.

Unsure if you have a redundancy claim?

If you’re unsure whether or not a genuine redundancy applies to you, or if your employer has met the requirements for a redundancy, it doesn’t hurt to seek advice.

Reach out to our employment law experts by contacting 1800 444 141 or filling out our enquiry form.