Given the JobKeeper payments and related enabling directions are due to expire soon, it is timely to revisit what is required of you to effect a genuine redundancy, as that term is defined in the Fair Work Act.

The Fair Work Act provides that a “genuine redundancy” is when:

  1. you no longer require the employee’s job [see Note 1] to be performed by anyone due to changes in your operational requirements;
  2. it is not reasonable to redeploy [see Note 2] the employee within your business (or group of businesses); and
  3. you have complied with any obligation to consult [see Note 3] with the employee imposed by any applicable award or enterprise agreement (or other registered agreement).

Note 1

It is important to understand the difference between an employee’s “job” and their “duties”. Usually an employee’s duties will still need to be performed by someone after the restructure.  For example, you have two full-time cleaners [the jobs]performing cleaning duties. Because there is not enough cleaning work for the two jobs, you restructure to one full-time cleaner and one part-time cleaner. The duties of the former full-time cleaner are still performed but now shared between the remaining full-time cleaner and the new part-time cleaner (who may be the former full-time cleaner).

Note 2

Redeployment must be considered not only within the business in which the employee was employed, but all businesses of yours or related to you.

Note 3

Most awards and registered agreement will include a consultation clause. 

Notice and redundancy pay on termination

Notice

Like any other termination of employment, the employee is entitled to written notice of it, and to receive notice (or payment in lieu of notice) in accordance with the following table:

Period of continuous service at the end of the day the notice is givenPeriod
Not more than 1 year1 week
More than 1 year but not more than 3 years2 weeks
More than 3 years but not more than 5 years3 weeks
More than 5 years4 weeks

If the employee is over 45 years of age and has completed at least two years of service, an additional one week’s notice is required to be given.

Redundancy pay

If your business (including all related businesses) employs fewer than 15 people, then your employees do not have an entitlement to redundancy pay.  

Otherwise, your employee’s entitlement to redundancy pay is as per the following table and see Note 4:

Period of continuous service on terminationPeriod
At least 1 year but less than 2 years4 weeks
At least 2 year but less than 3 years6 weeks
At least 3 year but less than 4 years7 weeks
At least 4 year but less than 5 years8 weeks
At least 5 year but less than 6 years10 weeks
At least 6 year but less than 7 years11 weeks
At least 7 year but less than 8 years13 weeks
At least 8 year but less than 9 years14 weeks
At least 9 year but less than 10 years16 weeks
At least 10 years12 weeks

The consultation process

This process can be used by all businesses, no matter the size or HR support available. However, the smaller the business, the greater the tolerance that will be given to effect the consultation quickly. The process is:

  1. provide relevant information to the employee about the proposed change;
  2. give the employee the opportunity to present their views in response to this information; and
  3. genuinely consider the employee’s views.

[Note 4] Your contracts, policies and relevant industrial instruments

The information in this email is subject to the terms of all industrial instruments applicable to your employees including individual contracts, your policies and applicable awards or registered agreements.

If those instruments provide your employees with a more generous entitlement, then the more generous entitlement will apply.

If you have any question, please contact us.


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