Being made redundant can be a confronting experience, especially when it happens suddenly or without a clear explanation. But Australian workers have rights, and one of the most important is the right to a redundancy payment. If you’re facing redundancy, understanding what you’re owed and how to respond is key to protecting your future.
In this article, we explain how redundancy payment works, who qualifies, and what steps to take if your entitlements are denied.
Contents
What Is a Redundancy?
A redundancy occurs when your employer no longer needs your job to be done. This can be due to:
- Business restructuring
- Company downsizing
- Automation or changes in technology
- Outsourcing or relocation
It must be a genuine redundancy, meaning your role is eliminated and not simply given to someone else.
What Is a Redundancy Payment?
A redundancy payment is a taxable lump sum paid to eligible employees whose roles are genuinely made redundant. The amount depends on your length of service and is set out under the National Employment Standards (NES).
Minimum NES Redundancy Entitlements:
- 1 to under 2 years: 4 weeks’ pay
- 2 to under 3 years: 6 weeks’ pay
- 3 to under 4 years: 7 weeks’ pay
- And so on, up to 16 weeks for 10+ years of service
Note: Some awards, agreements or contracts offer more generous terms.
Who Is Eligible for a Redundancy Payment?
You may qualify if you are:
- A full-time or part-time employee
- Employed for at least 12 months
You may not be eligible if you are:
- A casual worker
- A small business employee (under 15 employees)
- Offered a suitable alternative employment, which you refused
Other Redundancy Entitlements
In addition to redundancy pay, you may also be entitled to:
- Notice of termination or payment in lieu of
- Accrued annual leave and long service leave payouts
- Final wages up to your last working day
What to Do If You’re Made Redundant
- Request written confirmation of your redundancy and final pay breakdown
- Review your contract and award to check your specific entitlements
- Contact your union if anything appears incorrect or unclear
- Lodge a complaint with the Fair Work Ombudsman if your employer refuses to pay
The Role of Unions in Redundancy Cases
Unions are crucial in ensuring workers are treated fairly during redundancy. They can:
- Verify your entitlements
- Negotiate a fair exit package
- Challenge non-genuine redundancies
- Support you through Fair Work Commission processes
Protect Yourself Against Unfair Redundancy
Unfortunately, some employers misuse redundancy as a cover for dismissing workers unfairly. Warning signs include:
- Your jobis being advertised or filled shortly after
- A lack of consultation or notice
- Redundancy is being used to target union members or whistleblowers
In such cases, you may have grounds to lodge an unfair dismissal claim.
Know Your Rights and Plan Ahead
A genuine redundancy may be beyond your control, but how you respond matters. Understanding your redundancy payment rights and seeking advice early can help you plan your next steps with confidence.
If you’ve recently been made redundant or think it may happen soon, speak to your union or contact the Fair Work Ombudsman. Your work deserves respect—and so does your exit.