Redundancy

Redundancy is another way of ending employment. Many awards and agreements already provide for notice periods, severance payments and other separation benefits.

The State standard for severance payments is as follows:

Period of continuous service	Additional payments in cases of redundancy
less than 1 year	Nil
1 - 2 years	4 weeks
2 - 3 years	6 weeks
3 - 4 years	7 weeks
more than 4 years	8 weeks

There are now significant restrictions on the provisions for redundancy pay under federal Workplace Relations Act 1996 (Cth). Award provision for redundancy pay can only relate to a termination of employment that is either for ‘operational reasons’, or where the employer is insolvent. The provision does not apply to businesses with fewer than 15 employees. Further, the award right to severance pay may be bargained away.

Under the Workplace Relations Act 1996 (Cth), where there are at least 15 employees being retrenched, employers are required to take certain steps before proceeding with the redundancy terminations. Those steps require the employer to inform the Commonwealth Employment Service [s 600], as soon as practicable after deciding on redundancy, about:

the terminations and the reasons for them
the number and categories of employees likely to be affected
the period over which the employer plans to carry out the redundancies

Beyond these requirements, obligations on the employer are limited. There is no effective requirement to notify and consult with trade unions [see s 668]. Furthermore, the AIRC does not have power to intervene.

A employee who is genuinely redundant (meaning that the job the employee was engaged to do is no longer needed) can no longer make a claim a claim for unfair dismissal under federal law.