Redundancy Payment in Australia: A Guide for Employees

Redundancy is a reality that many workers face at some point in their careers. Whether it’s due to restructuring, downsizing, or the closure of a business, redundancy can have a significant emotional and financial impact. Fortunately, under Australian law, workers who are made redundant are entitled to a redundancy payment in many circumstances.

What Is a Redundancy Payment?

A redundancy payment is a form of monetary compensation given to employees who have lost their jobs due to redundancy. Redundancy occurs when an employer decides to reduce their workforce because a position is no longer needed or no longer exists. This could happen for various reasons, including technological changes, company downsizing, or economic conditions.

Under the Fair Work Act, employees are entitled to redundancy pay if they are dismissed due to redundancy and have been employed with their employer for a minimum period. The entitlement is based on the length of continuous service with the employer, and the amount varies accordingly:

• Less than 1 year of service: No redundancy pay is required.
• 1-2 years: 4 weeks’ pay.
• 2-3 years: 6 weeks’ pay.
• 3-4 years: 7 weeks’ pay.
• 4-5 years: 8 weeks’ pay.
• 5-6 years: 10 weeks’ pay.
• 6-7 years: 11 weeks’ pay.
• 7-8 years: 13 weeks’ pay
• 8-9 years: 14 weeks’ pay.
• 9-10 years: 16 weeks’ pay.

What Happens if Redundancy Pay is Not Provided?

If an employee believes they are entitled to redundancy pay but have not received it, they can take the matter to the Fair Work Commission, the Fair Work Ombudsman, or their local union. These provide the necessary support that employees may need when resolving disputes, challenging unfair redundancies, and more.

What to Do If Your Job Is Redundant?

Losing your job due to redundancy can be a stressful time, but there are ways to address it in a way that’s professional and protects your employee rights:

• Check Your Entitled Redundancy Payments: Make sure you understand your redundancy payment entitlements. Under the Fair Work Act 2009, employees who have been employed for at least 12 months are entitled to redundancy pay. 
• Ask About a Notice Period: Most employees are entitled to a notice period or a payment in lieu of notice. The length of this notice depends on how long you’ve worked with the employer.
• Ask About Other Support and Assistance: Some employers may offer other forms of support during redundancy, such as outplacement services or references.

Going Through Redundancy With Proper Support

Redundancy is difficult, but it’s also an opportunity to reflect on your career and consider new possibilities. With the right knowledge and planning, you can navigate this transition successfully and find new opportunities. If you need assistance, don’t hesitate to reach out to the Fair Work Commission, your local union, or a legal professional to ensure that your rights are protected throughout the process.