Redundancy Entitlements
Understand Your Rights & Entitlements When Made Redundant
If you are in the unfortunate position of having being made redundant from your employment, it is important that you understand your rights and entitlements to assist you through what is no doubt a very challenging time
What is redundancy?
Redundancy occurs when your employer lets you go due to your job becoming obsolete or your employer not having enough work to sustain its current workplace. It is different from when you resign or your employment is terminated for performance or conduct reasons.
A redundancy must be genuine or accepted by you as the employee voluntarily.
What are your entitlements?
The redundancy payout you receive is based on your period of continuous service with your employer. It ranges from four (4) weeks pay for someone with between one (1) to two (2) years continuous service, to 16 weeks for someone with between nine (9) to ten (10) years continuous service. For anyone with ten years or more continuous service the payout is fixed at twelve weeks.
The payout is based on your base hourly rate and does not include provisions for the following:
- Bonuses;
- Overtime or penalty rates;
- Leave loadings;
- Any other allowances you receive (e.g. a phone or petrol allowance).
You have the option of trying to negotiate with your employer with respect to the redundancy package that you receive, particularly if it is a voluntary redundancy.
In addition, you should also receive all of your unused annual leave and long service leave entitlements. Unused sick leave is not generally payable on redundancy.
There may also be tax implications to any redundancy payment you receive. It is important that you obtain advice from a qualified accountant if you receive, or are going to receive a redundancy payout.
Exceptions To Redundancy Pay:
Unfortunately, not everyone is entitled to redundancy pay. Exceptions include:
- Employees with less than 12 months continuous service;
- Casual employees;
- Where you are employed for a fixed period of time or specific project;
- Employees terminated for serious misconduct;
- Employees of a small business (less than 15 employees).
What if I do not think my redundancy is genuine?
If you believe that your redundancy was not genuine, then you can lodge an unfair dismissal claim with the Fair Work Commission. A non-genuine redundancy occurs when the real reason for your termination is different, for example discrimination or performance based reasons.
For example, if your employer immediately rehires someone to replace you, that would be a clear sign that your redundancy was not a genuine one.
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