Q: I no longer need one of my team members. What do I have to pay in the case of a redundancy?
A: Information relating to employer redundancy obligations starts at Section 117 of the Fair Work Act 2009 (the Act).
Basically, employers must provide an employee whose position is being made redundant notice of the termination along with a redundancy payment.
Notice of termination is outlined in the table in Section 117 (3) (a) of the Act and ranges from one week to four weeks dependent on the employee’s length of continuous service. Remember to add an additional one week for any employee who is over 45 years of age and who has been employed continuously for at least two years at the time the notice is given.
The minimum redundancy payment is outlined in Section 119 (2) of the Act and ranges from zero weeks to 16 weeks dependent on the employee’s length of continuous service and the size of the organisation.
Note, if your employees are covered by an industrial instrument other than the Fair Work Act 2009, such as an Enterprise Agreement, you will need to refer to that document for correct entitlements. Also, where the individual’s employment agreement states an entitlement over the minimum standard, you will need to ensure they receive the higher amount.
Redundancy processes can be very complex and if executed poorly (or unlawfully), they can have negative consequences. Nexus Human Resources strongly advises employers seek external advice from a HR professional prior to carrying out redundancies. Call us on 1300 15 10 11 if you require assistance.