Due to the unfortunate economic conditions generated by the COVID-19 pandemic, many businesses around Australia may be considering reducing staffing costs and this may result in some roles being made redundant.
MINIMUM NOTICE PERIODS
When ending an employment because of redundancy, if the employee is engaged on a permanent basis you need to provide adequate notice or make payment in lieu.
The minimum notice period in the National Employment Standards (NES) is based on how many years your employee has worked for you (continuous service).
Minimum notice periods for redundancy according to the NES:
The applicable Modern Award or enterprise bargaining agreement may stipulate a longer notice period than the below. If so, then that notice period which needs to be applied.
|Period of employment.||Minimum notice period.|
|Less than one year||One week|
|One – three years||Two weeks|
|Three – five years||Three weeks|
|Over five years||Four weeks|
An employee will be entitled to an additional week of notice if they are over the age of 45 and have been engaged for at least 2 years.
Minimum Redundancy Payments
The NES also provides for a minimum payment to an employee made redundant.
Minimum payment for redundancy according to the NES
The applicable Modern Award or enterprise bargaining agreement may stipulate longer periods of continuous service and/or more weeks of pay than the below. If so, then that notice period which needs to be applied.
|Period of continuous service.|
|At least one year but under two years|
|At least two years but under three years|
|At least three years but under four years|
|At least four years but under five years|
|At least five years but under six years|
|At least six years but under seven years|
|At least seven years but under eight years|
|At least eight years but under nine years|
|At least nine years but under 10 years|
|At least 10 years|
Not all employees are entitled to redundancy pay. The following employees don’t get redundancy pay:
- employees whose period of continuous service with the employer is less than 12 months
- employees employed for:
- a stated period of time
- an identified task or project
- a particular season
- employees fired because of serious misconduct
- casual employees
- trainees engaged only for the length of the training arrangement
- employees of a small business
ARE THERE ANY ALTERNATIVES TO REDUNDANCY?
There are a few alternatives available to employers. We have put together a FREE guide explaining some of these alternatives, which you can download here.
If you’d like to more about redundancy, you can download the guide above or read this general article that can be found here. We also have some FAQs below.