Redundancy: the basics
If you are offered a redundancy at work, the first thing you should do is check with the SDA to ensure you are being offered a genuine redundancy.
A redundancy occurs when an employer does not require an employee’s job to be done by anyone or the employer becomes insolvent or bankrupt.
Redundancy can happen when a business:
- introduces new technology which replaces tasks
- slows down due to lower sales or production
- closes down
- relocates operations interstate or overseas
- restructures or reorganises because a merger or takeover happens.
Before a redundancy is offered to an employee, the employer must follow any consultation requirements in the award, enterprise agreement or registered agreement.
A redundancy is NOT genuine if the employer:
- still needs the employee’s job to be done by someone (for example, the employer hires someone else to do the job)
- has not followed relevant requirements to consult with employees and the union about the redundancy under the award or enterprise agreement
- could have reasonably given the employee another job within the employer’s business or associated entity.
Some registered agreements have more generous notice and redundancy entitlements than the National Employment Standards (NES).
To find out how much notice and redundancy pay is required refer to your award, agreement or the NES. You should familiarise yourself with the appropriate clause in your enterprise agreement or refer to
The General Retail Industry Award (Clause 15 – Redundancy).
Redundancy pay is based on the employee’s continuous period of service with the employer. The amount is paid at the employee’s base pay rate for ordinary hours worked.
It does not include:
- bonuses and loadings
- overtime or penalty rates.
A redundancy does not apply to:
- employees employed for a stated period, a season or for a project;
- casual employees;
- employees terminated for serious misconduct;
- employees of a small business of fewer than 15 employees at the time of redundancy;
- trainees or apprentices employed for the length of training engagement; or
- when continuous service is less than 12 months.
Note - If an employer can’t afford to pay redundancy, they can apply to the Fair Work Commission to have the amount reduced.
Remember- it is your position, not you, that is being made redundant. Workplace redundancies can impact your mental health. Ensure you take advantage of the assisted counseling service on offer at your workplace.
If you are advised that redundancies could be on offer at your workplace, contact the Newcastle SDA office immediately on 1300 SDA HELP (1300 732 4357) to seek advice.