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Presented By Owen Hodge Lawyers
Helping Employers and Employees with Redundancy Pay

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• Introduction
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• Understanding Redundancy Pay Obligations
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• How Much is Redundancy Pay?
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• Legal Issues Related to Redundancy Pay
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• What’s next
OVERVIEW

3.
INTRODUCTION

4.
INTRODUCTION
Under the National Employment
Standard, many workers are entitled
to receive redundancy pay if let go
from an organisation.
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Businesses must understand the rules
for redundancy pay in order to ensure
they comply with Section 119 of the
Fair Work Act 2009.
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5.
UNDERSTANDING
REDUNDANCY PAY OBLIGATIONS

6.
WHAT IS REDUNDANCY PAY
• Redundancy pay is required when an employer no longer
requires the employee or there is no longer a need for the
employee’s position within the organization. Employees
also receive redundancy pay if they are terminated
because an employer becomes bankrupt or insolvent.
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• Redundancy pay must be paid only if:
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An employer has 15 or more employees.
The employee worked for the employer for at
least one year, and the job was not a temporary
position with a specified duration, a training
position, or an apprenticeship.
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7.
• Redundancy pay is not required if the employee was terminated as a result of serious
misconduct, if the employee was a casual employee, or if the employee is covered by
an industry-specific redundancy scheme to whom a modern award applies.
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• An employee who is transferred to a new employer who recognizes a period of service
with the old employer is not entitled to receive redundancy pay.
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• Rejection of an offer of new employment can disqualify an employee from receiving
redundancy pay if the new employer would recognize the period of service with the
older employer and if the new job has equivalent terms and conditions as the old one.
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WHAT IS REDUNDANCY PAY

8.
HOW MUCH IS REDUNDANCY PAY?

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• Redundancy pay is determined based on the length of time an
employee is in the job.An employee who provided continuous
service for an employer for one year is entitled to four weeks
redundancy pay.
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• The number of weeks increases, up to 12 weeks of redundancy
pay for someone who has worked for an employer for at least 10
years.
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• The amount of redundancy pay an employee receives should
equal the total amount payable for the redundancy pay period at
the base rate of pay for ordinary work hours.
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10.
LEGAL ISSUES RELATED TO
REDUNDANCY PAY

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• Redundancy pay may seem straightforward: simply determine if the
employee is eligible and calculate the number of weeks based on the
worker’s years or service. However, complicated questions can arise
related to redundancy pay.
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• One of the key legal questions is whether the termination is a “genuine
redundancy” under the Fair Work Act. This means, among other things,
that the employer must comply with all obligations to consult about
the redundancy that could be applicable under an enterprise
agreement or award.
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• The decision to make the employee redundant must not have had
anything to do with the employee’s competence nor with any
misconduct or personal acts by the employee.
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Is it a “genuine redundancy”?

12.
Is it a “genuine redundancy”?
• A termination is a genuine redundancy only when it would not be
reasonable to redeploy the terminated worker within the employer’s
company or an associated entity. This could include vacant positions in
different divisions of the company, as well as different jobs for which an
employee may need some retraining as long as the retraining would
be reasonable.
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• The employer also must not require the employee’s job to be
performed by anyone in the future. While the specific job tasks done
by a particular employee may still be necessary, there must no longer
be a need for a dedicated employee to complete those tasks. This can
occur when a company restructures and the tasks previously done by
the terminated worker are distributed among other employees.
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13.
Is it a “genuine redundancy”?
• The key factor in determining whether a redundancy is genuine or not, is that the job the employee was terminated from
cannot continue to exist; if it does, the redundancy is not a genuine one. If an employer wants the job to continue but to be
done by someone else, this is not a genuine redundancy.
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• Employers must also be aware that redundancy and payment in lieu of notice are not the same. An employee who is
terminated is entitled to be notified in writing a set period of time before the termination occurs. The required notice is
based on the length of the employee’s service, with those who have worked for less than a year entitled to one week and
those who have worked for five years entitled to four weeks notice.
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• If an employer terminates an employee without the required notice, the employer must pay the worker the amount of
money they would have received by working through the end of the notice period. This is separate from and in addition to
redundancy pay if the employee is eligible for both.
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14.
WHAT’S NEXT

15.
Owen Hodge Lawyers can help employers and employees to determine when a genuine redundancy occurs, when
payments are required, and what entitlements an employee should receive after a termination. We also advises clients on
all issues related to the Fair Work Act, including severance and redundancy pay.
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Call us today on 1800 770 780 or contact us via ohl@owenhodge.com.au to speak with an employment lawyer who can
provide assistance with issues arising from employee termination.
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1800 770 780
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www.owenhodge.com.au
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ohl@owenhodge.com.au