With the cyclical nature of the mining industry currently in its doom and gloom cycle it is prudent to consider redundancy in the workplace and when this actually occurs.
Redundancy
Redundancy occurs when an employer:
a) decides they no longer want an employee’s job to be done by anyone and terminates their employment (except in the case of ordinary and customary
turnover of labour); or
b) becomes bankrupt or insolvent.
“Ordinary and customary turnover of labour”
Termination of employment will not involve redundancy if the termination is due to “the ordinary and customary turnover of labour”.
What constitutes “ordinary and customary turnover of labour” will depend on the particular circumstances in each case;
however the general rule is that termination will certainly not be in the “ordinary and customary turnover of labour” if an employer dismisses an employee and then immediately proceeds to employ another to undertake essentially the same duties as the dismissed employee.
Entitlements
The amount of redundancy pay, payable by the employer to the employee, under the National Employment Standards is calculated at the employee’s “base rate of pay” for his or her ordinary hours of work for the redundancy pay period. The base rate of pay does not include:
• incentive-based payments and bonuses
• loadings
• monetary allowances
• overtime or penalty rates; or
• any other separately identifiable amounts.
The redundancy pay periods range from 4 weeks to 16 weeks and are dependent on the employee’s period of continuous service with the employer on redundancy. It is also necessary to consider any applicable Award that is adopted by the workplace to consider whether any differing redundancy provisions apply to the employee.
Termination
If an employer terminates an employee’s employment, and such termination does not fall within the definition of “redundancy” then the employer only has to pay termination entitlements, which are less than redundancy entitlements. The general rule for termination entitlements is as per the below table:
| Employee’s period of continuous service with the employer at the end of the day the notice is given | Period | Not more than 1 year | 1 week | More than 1 year but not more than 3 years | 2 weeks | More than 3 years but not more than 5 years | 3 weeks | More than 5 years | 4 weeks |
If you’re an employee or employer who would like further information with respect to redundancy, or any workplace matter in general, please feel free to contact our office so that we may discuss your particular
circumstances and how the law applies to you.
