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) [s119 – 122 Fair Work Act (Cth)].
Redundancy under the NES
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.
Service prior to January 2010 when the new Fair Work Act 2009 (Cth) came into effect may or may not count, depending on whether an employee had an entitlement to redundancy pay under the old system – see the Fair Work Ombudsman’s Notice and Redundancy Calculator .
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 expectation of ongoing employment).
Also, if a casual employee becomes a permanent employee, their continuous service starts from when they became permanent.
Transfer of business over the time an employee was working at the business may affect entitlements. Service for the prior business will only be not counted 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 on 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 have to be paid to you on your redundancy.
For redundancy due to insolvency or bankruptcy of the employer see: Upon the sale or winding up of a business.
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.