What is redundancy?
A redundancy is a termination of employment by the employer because the employer:
- does not need that job done by anyone; or
- requires fewer employees to do that particular job.
Redundancies commonly arise where an employer is: closing part or all of the business; restructuring; cutting staff to save costs; introducing new technology.
What entitlements does an employee who is made redundant have?
Employees who have been made redundant may be entitled to redundancy pay. The purpose of redundancy pay is to compensate employees whose job has become redundant, for lost personal leave, long service leave, and inconvenience and hardship imposed on the employee such as loss of security of employment and other kinds of losses.
Am I entitled to redundancy pay?
The National Employment Standards (NES) under the Fair Work Act 2009 entitle employees to a redundancy payment and sets out the minimum requirements. Redundancy entitlements may also arise out of the terms of: an award; an enterprise agreement; an Australian Workplace Agreement (AWA) or other statutory agreement; a contract of employment; or a company policy. If you are employed by a partnership or a state government department, you may also have a right to redundancy pay under State legislation.
Employees that are not entitled to redundancy pay are employees of a business which has:
- fewer than 15 employees;
- in some instances, persons that are employed on a casual basis;
- persons that employed on a fixed term contract;
- persons where the termination results from the "ordinary and customary turnover of labour";
- and apprentices.
It is important that you know and understand your individual redundancy entitlements.
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