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New workplace laws come into effect on July 1st 2009. This site will be updated shortly to reflect the new Fair Work laws.


Redundancy means essentially that the employer no longer wants the job the employee is doing to be done by anyone, and that the employee cannot be redeployed to another job within the business.  

It may come about because of a downturn in work volume that the employer has to do, or due to a restructuring of the business.

A redundant worker is entitled to Notice of Termination, and many but not all are also entitled to a redundancy / severance payment.

These are two different elements, although both are based on the length of time of employment (see Notice).

Redundancy amounts vary widely between workplaces, and between states.  The amount a particular employee may be entitled to receive could be set by either state legislation or by Awards and Certified Agreements or the employee's individual contract of employment. Redundancy / severance is not included in Victorian Minimum Wage Orders.

Redundancy severance amounts

The following table sets out the main Federal Award and NSW state provisions - amounts in other states differ again.

The Federal Award provisions were decided by the Australian Industrial Relations Commission (AIRC) in March 2004.

Length of service
Federal Award standard
NSW Standard :
Under 45 / Over 45
Less than 1 year
Nil
Nil / Nil
1 year - less than 2 years
4 weeks
4/5 weeks
2 years - less than 3 years
6 weeks 7/8.75 weeks
3 years - less than 4 years
7 weeks 10/12.5 weeks
4 years - less than 5 years
8 weeks 12/15 weeks
5 years - less than 6 years
10 weeks 14/17.5 weeks
a) 6 years and less than 7 years (Federal)  OR

(b) 6 years and over (NSW) 

11 weeks


16/20 weeks
7 years - less than 8 years
13 weeks (no further increase)
8 years - less than 9 years
14 weeks
9 years- less than 10 years
16 weeks
10 years and over
12 weeks (to reflect availability of pro rata long service leave)




 Notes:
(1) Where the employer has less than 15 employees, the federal award redundancy severance pay provision was abolished from December 2005.
(2) The NSW provisions do not apply where the employer has fewer than 15 employees – see Employment Protection Act 1982 (NSW).


The 'Community Standard' for redundancy payments:

Prior to March 2004, the "community standard" for redundancy payments was as in the table below, although many certified agreements are significantly higher:

length of employment minimum redundancy pay
Not more than 1 year nil
1 year up to 2 years 4 weeks pay
2 years up to 3 years 6 weeks pay
3 years up to 4 years 7 weeks pay
over 4 years 8 weeks pay


Insolvent or bankrupt employers
If an employer goes broke, the Commonwealth Government provides a safety net of minimum payments but only at the "community standard". Follow the link here for more information on the Australian Government web site about the GEERS scheme.


If an employee is made redundant, accumulated entitlements must be paid out  in addition to the above - ie, accrued annual leave, long service leave (if the employee is eligible). Casual employees do not receive redundancy / severance payments.

Note: different amounts apply in the building industry. 





 

 

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