Redundancy: The Facts

Entitlements

The National Employment Standards (NES) cover everyone in the national workplace relations system, which in Queensland includes those employed by a company, sole-trader, partnership, or other unincorporated and non-trading corporations.

The NES set out ten minimum entitlements, which specifically include redundancy pay. Casual employees receive only some of the NES entitlements, and they are not entitled to redundancy pay.

Awards, agreements or employment contracts are not allowed to be less favourable than the NES minimum entitlements, and where they are, the NES entitlements will apply instead. Awards and agreements may provide flexible terms in relation to when redundancy payments will not apply.

Under the NES, employers are required to give up to 16 weeks redundancy pay.

Have you been made genuinely redundant?

A genuine redundancy is where:

• Your job is no longer required by the employer because of changes to the business (the employer cannot have someone else do your job instead);
• Where the employer followed the correct requirements such as in the award, agreement or other industrial instrument that applies; or
• Where your employer goes into liquidation or becomes bankrupt.

Where the redundancy is not a genuine redundancy, it may be classified as unfair dismissal. Please note that there are strict limitation periods in pursuing an unfair dismissal claim, so you will need to act fast and engage a solicitor for assistance.

When might you receive a redundancy payment?

You may be entitled to a redundancy or severance payment where:

• There is an award or agreement that applies to you and provides for redundancy pay entitlements; or
• You have worked for an employer with more than 15 employees for at least 12 months.

There are a range of circumstances where there may be no entitlement to redundancy payments, such as during a fixed term contract, or where the business has less than 15 employees.

How much redundancy pay are you entitled to?

Under the NES, your redundancy pay is calculated using your base rate of pay for your ordinary hours of work, which doesn’t include things like bonuses, loadings, allowances, or penalty rates etc.

There is a scale that determines the redundancy pay you are entitled to, based on the number of years of continuous service with your employer, starting from 4 weeks’ pay for employees with one to two years’ service, and 16 weeks’ pay for employees with nine to ten years’ service.

How we can help

In today’s economic climate, redundancy is not far from most people’s thoughts. If you would like further advice, or if you are unsure whether you’re entitled to certain benefits, please do not hesitate to contact our office.