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Redundancy

National system employees redundancy entitlements

Redundancy is when you lose your job because it no longer exists.

Right to redundancy pay is for all employees in businesses with 15 employees or more, for small business employees (14 employees or fewer), redundancy pay is generally not available, it is only if it is covered in the award, contract or agreement.

A genuine redundancy is when:

  • The employer no longer requires the job to be performed by anyone; and
  • The employer has complied with the consultation obligations in the award or enterprise agreement; and
  • It would be unreasonable to redeploy you.

If the redundancy is not genuine, then you may have a case for unfair dismissal.

Unless covered by an industry specific redundancy scheme, or greater entitlements in an award, contract or agreement, redundancy pay is covered by the National Employment Standards (NES) [Fair Work Act 2009 (Cth) ss 119-122].

Employee’s period of continuous service with the employer on termination Redundancy pay period
At least 1 year but less than 2 years 4 weeks
At least 2 years but less than 3 years 6 weeks
At least 3 years but less than 4 years 7 weeks
At least 4 years but less than 5 years 8 weeks
At least 5 years but less than 6 years 10 weeks
At least 6 years but less than 7 years 11 weeks
At least 7 years but less than 8 years 13 weeks
At least 8 years but less than 9 years 14 weeks
At least 9 years but less than 10 years 16 weeks
At least 10 years 12 weeks

Continuous service includes all approved paid leave; however any approved unpaid leave is deducted from the calculation of service.

The Fair Work Ombudsman’s Notice and Redundancy Calculator may assist in determining the redundancy pay period.

Casual employees are not generally entitled to redundancy pay [s 123(1)(c) Fair Work Act 2009 (Cth)]. However, be aware that some workers are called casual, when they are actually permanent (working regular hours with an advance commitment to ongoing employment). Also, if a casual employee becomes a permanent employee, their continuous service starts from when they became permanent [see ss 117(4), 119(3)].

Transfer of business over the time an employee was working at the business may affect entitlements. Service for the prior business will only be discounted if the new business is not an associated entity (a business that is related to the original business) and it gave the employees written notice when it took over that their prior service would not count. See the Fair Work Ombudsman’s Employee entitlements on a transfer of business page for more information.

Notice of dismissal or redundancy

An employer must provide an employee written notice or payment in lieu of notice of their dismissal or redundancy, even if it is a small business (apart from casuals, employees at the end of a fixed term contract or employees dismissed for serious and wilful misconduct). This is in addition to any redundancy entitlements.

Unless the same or greater entitlements are provided for in an award, contract or agreement, notice pay on termination is covered by the National Employment Standards (NES) [ss117 -118 Fair Work Act 2009 (Cth)].

Notice under the NES

Employee’s period of continuous service with the employer at the end of the day the notice is given Period notice or payment in lieu
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

Other entitlements such as accrued annual leave and long service leave also have to be paid on redundancy.

For redundancy due to insolvency or bankruptcy of the employer see: Upon the sale or winding up of a business.

Redundancy  :  Last Revised: Mon Jan 15th 2024
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.