{"id":626,"date":"2023-07-28T23:41:29","date_gmt":"2023-07-28T11:41:29","guid":{"rendered":"https:\/\/www.workstem.com\/au\/blog\/auto-draft\/"},"modified":"2026-03-20T01:42:13","modified_gmt":"2026-03-19T12:42:13","slug":"redundancy-guide","status":"publish","type":"post","link":"https:\/\/www.workstem.com\/au\/blog\/redundancy-guide\/","title":{"rendered":"The Ultimate Employee Redundancy Guide"},"content":{"rendered":"<div class='post-index' id='post-index'><a href='###' id='post-index-close'><i class='fa fa-list'><\/i><\/a>\r\n\t\t\t\t<h3 class='post-index-title'>Table of content<\/h3>\r\n\t\t\t\t<div class='post-index-inner' id='post-index-inner'>\r\n\t\t\t\t<ol class='post-index-list'><li class=\"post-index-item\" data-tt=\"title-idx-0\" ><a href=\"###\"title=\"What is redundancy?\">What is redundancy?<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-1\" ><a href=\"###\"title=\"When does redundancy happen?\">When does redundancy happen?<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-2\" ><a href=\"###\"title=\"What&#8217;s a genuine redundancy?\">What&#8217;s a genuine redundancy?<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-3\" ><a href=\"###\"title=\"How to calculate redundancy payment and entitlements?\">How to calculate redundancy payment and entitlements?<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-4\" ><a href=\"###\"title=\"Redundancy case study\">Redundancy case study<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-5\" ><a href=\"###\"title=\"How can Workstem assist you?\">How can Workstem assist you?<\/a><\/li><\/ol>\r\n\t\t\t<\/div><\/div>\r\n\t\t\t<script>\r\n\t\t\t$(function(){\r\n\t\t\t\tvar contIdxHeight = $('#post-index-inner').height()+20;\r\n\t\t\t\t$('#post-index-inner').css('height',contIdxHeight+'px');\r\n\t\t\t\t$('#post-index-close').on('click',function(){\r\n\t\t\t\t\tif($('#post-index-inner').height()>20) {\r\n\t\t\t\t\t\t$('#post-index-inner').css('height',0);\r\n\t\t\t\t\t\t$('#post-index-inner').css('padding-top',0);\r\n\t\t\t\t\t} else {\r\n\t\t\t\t\t\t$('#post-index-inner').css('height',contIdxHeight+'px');\r\n\t\t\t\t\t\t$('#post-index-inner').css('padding-top','20px');\r\n\t\t\t\t\t}\r\n\t\t\t\t});\r\n\t\t\t\t$('.post-index-item').on('click',function(){\r\n\t\t\t\t\tvar tt=$(this).data('tt');\r\n\t\t\t\t\tscrollPosition(document.getElementById(tt));\r\n\t\t\t\t});\r\n\t\t\t});\t\r\n\t\t\t<\/script><div class='post-content-full'><h2 id=\"title-idx-0\" class=\"icon-anchor\">What is redundancy?<\/h2>\n<p>In Australia, redundancy refers to a situation where an employer terminates an employee&#8217;s employment because their position is no longer required or the business is downsising, for example, insolvent or bankrupt. It is a form of job loss that is not related to the individual employee&#8217;s performance or conduct.<\/p>\n<p>Redundancy may occur due to various reasons. When an employee is made redundant, they are entitled to certain rights and entitlements, including redundancy pay, notice period, and other benefits as per the applicable employment laws and any relevant employment agreements or awards.<\/p>\n<h2 id=\"title-idx-1\" class=\"icon-anchor\">When does redundancy happen?<\/h2>\n<p>Redundancy can occur under various circumstances. It happens when an employer either:<\/p>\n<ul>\n<li aria-level=\"1\">doesn&#8217;t need an employee\u2019s job to be done by anyone, or<\/li>\n<li aria-level=\"1\">becomes insolvent or bankrupt.<\/li>\n<\/ul>\n<p>Redundancy can happen when the business:<\/p>\n<ul>\n<li aria-level=\"1\">introduces new technology (for example, the job can be done by a machine)<\/li>\n<li aria-level=\"1\">slows down due to lower sales or production<\/li>\n<li aria-level=\"1\">closes down<\/li>\n<li aria-level=\"1\">relocates interstate or overseas<\/li>\n<li aria-level=\"1\">restructures or reorganises because a merger or takeover happens<\/li>\n<\/ul>\n<p>Redundancy must be a genuine reason and not related to an individual employee&#8217;s performance or conduct. The specific circumstances of redundancy can vary based on factors such as industry, company size, and economic conditions.<\/p>\n<p>Reference: <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.fairwork.gov.au\/ending-employment\/redundancy#when-does-redundancy-happen\" target=\"_blank\" rel=\"noopener\">Fair Work<\/a><\/span><\/p>\n<h2 id=\"title-idx-2\" class=\"icon-anchor\">What&#8217;s a genuine redundancy?<\/h2>\n<p>A genuine redundancy is when:<\/p>\n<ul>\n<li aria-level=\"1\">the person\u2019s job doesn&#8217;t need to be done by anyone<\/li>\n<li aria-level=\"1\">the employer followed any consultation requirements in the award, enterprise agreement or other registered agreement.<\/li>\n<\/ul>\n<p>When an employee&#8217;s dismissal is a genuine redundancy the employee isn&#8217;t able to make an unfair dismissal claim.<\/p>\n<p>A dismissal is not a genuine redundancy if the employer:<\/p>\n<ul>\n<li aria-level=\"1\">still needs the employee\u2019s job to be done by someone (for example, hires someone else to do the job)<\/li>\n<li aria-level=\"1\">has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or<\/li>\n<li aria-level=\"1\">could have reasonably, in the circumstances, given the employee another job within the employer\u2019s business or an associated entity.<\/li>\n<\/ul>\n<p>Reference: <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.fairwork.gov.au\/ending-employment\/redundancy#when-does-redundancy-happen\" target=\"_blank\" rel=\"noopener\">Fair Work<\/a><\/span><\/p>\n<h2 id=\"title-idx-3\" class=\"icon-anchor\">How to calculate redundancy payment and entitlements?<\/h2>\n<p>In Australia, the calculation of redundancy payments and entitlements is based on various factors, including the employee&#8217;s length of service, age, and the applicable modern award, enterprise agreement, or employment contract.<\/p>\n<p>In terms of entitlements, when an employee is made redundant, they may be eligible for a redundancy payment, also known as a severance package. However, there are certain exceptions to consider.<\/p>\n<h3>Employees who don&#8217;t get redundancy pay<\/h3>\n<p>Under the National Employment Standards (NES), redundancy pay doesn&#8217;t need to be paid in some circumstances. The following employees don\u2019t get redundancy pay:<\/p>\n<ul>\n<li aria-level=\"1\">employees whose period of continuous service with the employer is less than 12 months<\/li>\n<li aria-level=\"1\">employees employed for: a stated period of time; an identified task or project; a particular season<\/li>\n<li aria-level=\"1\">employees terminated because of serious misconduct<\/li>\n<li aria-level=\"1\">casual employees<\/li>\n<li aria-level=\"1\">trainees engaged only for the length of the training agreement<\/li>\n<li aria-level=\"1\">apprentices<\/li>\n<\/ul>\n<h3>Notice period<\/h3>\n<p>To terminate an employee\u2019s employment, an employer has to give them written notice of their last day of employment (some exceptions apply).<\/p>\n<p>An employer can give notice to the employee by:<\/p>\n<ul>\n<li aria-level=\"1\">delivering it personally<\/li>\n<li aria-level=\"1\">leaving it at the employee\u2019s last known address<\/li>\n<li aria-level=\"1\">sending it by pre-paid post to the employee\u2019s last known address, or<\/li>\n<li aria-level=\"1\">if the employee agrees, sending it electronically by email or text message<\/li>\n<\/ul>\n<p>The amount of notice period is calculated as below:<\/p>\n<table>\n<tbody>\n<tr>\n<td>\n<p style=\"text-align: center;\"><strong>Period of continuous service<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\"><strong>Minimum notice period (by week)<\/strong><\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">1 year or less<\/p>\n<\/td>\n<td style=\"text-align: center;\">1<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">More than 1 year \u2013 3 years<\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\">2<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">More than 3 years \u2013 5 years<\/td>\n<td>\n<p style=\"text-align: center;\">3<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">More than 5 years<\/td>\n<td>\n<p style=\"text-align: center;\">4<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3>Redundancy payment<\/h3>\n<p>Redundancy is paid at the employee&#8217;s base rate of pay for the ordinary hours they would otherwise have worked over that period.<\/p>\n<p>An employee&#8217;s base rate of pay (other than a pieceworker) is the pay rate they receive for working their ordinary hours, but does not include the following:<\/p>\n<ul>\n<li aria-level=\"1\">incentive-based payment and bonuses<\/li>\n<li aria-level=\"1\">loadings<\/li>\n<li aria-level=\"1\">monetary allowances<\/li>\n<li aria-level=\"1\">overtime or penalty rates<\/li>\n<li aria-level=\"1\">any other separately identifiable amounts.<\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<td>\n<p style=\"text-align: center;\"><strong>Period of continuous service<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\"><strong>Weeks of pay<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least one year but under two years<\/td>\n<td>\n<p style=\"text-align: center;\">4<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">At least two years but under three years<\/p>\n<\/td>\n<td style=\"text-align: center;\">6<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">At least three years but under four years<\/p>\n<\/td>\n<td style=\"text-align: center;\">7<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">At least four years but under five years<\/p>\n<\/td>\n<td style=\"text-align: center;\">8<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\">At least five years but under six years<\/p>\n<\/td>\n<td style=\"text-align: center;\">10<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least six years but under seven years<\/td>\n<td>\n<p style=\"text-align: center;\">11<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least seven years but under eight years<\/td>\n<td>\n<p style=\"text-align: center;\">13<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least eight years but under nine years<\/td>\n<td>\n<p style=\"text-align: center;\">14<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least nine years but under 10 years<\/td>\n<td style=\"text-align: center;\">16<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">At least 10 years<\/td>\n<td>\n<p style=\"text-align: center;\">12*<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>* There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least 10 years continuous service. This is consistent with the 2004 Redundancy Case decision made by the Australian Industrial Relations Commission.<\/em><\/p>\n<h2 id=\"title-idx-4\" class=\"icon-anchor\">Redundancy case study<\/h2>\n<p>The formula for calculating redundancy payment is:<\/p>\n<p><strong>Base Rate of Pay x Redundancy Pay Period = Redundancy Pay<\/strong><\/p>\n<p><strong>Example:<\/strong> Employee A earns AU$96,000 and has worked seven continuous years. His redundancy pay period is 13 weeks, meaning he is entitled to a payment of 13 weeks of his yearly salary.<\/p>\n<p>His redundancy payment would be: <strong>13\/52 x AU$96,000 = AU$24,000<\/strong><\/p>\n<h2 id=\"title-idx-5\" class=\"icon-anchor\">How can Workstem assist you?<\/h2>\n<p><a href=\"https:\/\/www.workstem.com\/au\/\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #3366ff;\">Workstem<\/span><\/a> is a one-stop payroll &amp; HR platform that simplifies the redundancy process. We facilitate clear employee information in one master file and provide a streamlined and compliant approach to handling <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/product\/payroll\/\" target=\"_blank\" rel=\"noopener\">Employment Termination Payments (ETP)<\/a><\/span>, ensuring compliance with legal requirements, managing notice periods, and helping organise and store relevant documents.<\/p>\n<p>Take control of your redundancy payment and more payroll issues today and experience the convenience of <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/\" target=\"_blank\" rel=\"noopener\">Workstem<\/a><\/span> now!<\/p>\n<article class=\"text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]\" dir=\"auto\" data-turn-id=\"request-WEB:e8ed6405-8ed2-4ae6-9333-7dc6b0aff62c-2\" data-testid=\"conversation-turn-4\" data-scroll-anchor=\"true\" data-turn=\"assistant\">\n<div class=\"text-base my-auto mx-auto pb-10 [--thread-content-margin:--spacing(4)] @w-sm\/main:[--thread-content-margin:--spacing(6)] @w-lg\/main:[--thread-content-margin:--spacing(16)] px-(--thread-content-margin)\">\n<div class=\"[--thread-content-max-width:40rem] @w-lg\/main:[--thread-content-max-width:48rem] mx-auto max-w-(--thread-content-max-width) flex-1 group\/turn-messages focus-visible:outline-hidden relative flex w-full min-w-0 flex-col agent-turn\">\n<div class=\"flex max-w-full flex-col grow\">\n<div class=\"min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal [.text-message+&amp;]:mt-1\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"f7f6aadf-5859-41b6-aa76-8d83eab3153c\" data-message-model-slug=\"gpt-5-1-thinking\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[1px]\">\n<div class=\"markdown prose dark:prose-invert w-full break-words light markdown-new-styling\">\n<h2 data-start=\"1710\" data-end=\"1996\">Read More<\/h2>\n<h3 data-start=\"1710\" data-end=\"1996\">Termination &amp; Payroll<\/h3>\n<p data-start=\"242\" data-end=\"321\"><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/blog\/redundancy-pay-in-australia-calculating-severance-entitlements-under-the-nes\/\" target=\"_blank\" rel=\"noopener\"><em>Redundancy Pay in Australia: Calculating Severance Entitlements Under the NES<\/em><\/a><\/span><\/p>\n<p data-start=\"242\" data-end=\"321\"><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/blog\/redundancy-and-etp-tax-implications\/\" target=\"_blank\" rel=\"noopener\"><em>Redundancy and ETP Tax Implications<\/em><\/a><\/span><\/p>\n<p data-start=\"242\" data-end=\"321\"><em><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/glossary\/redundancy-payment\/\" target=\"_blank\" rel=\"noopener\">Redundancy Payment<\/a><\/span><\/em><\/p>\n<h3 data-start=\"242\" data-end=\"321\">Final Pay &amp; Termination Payments<\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<p aria-hidden=\"true\" data-edge=\"true\"><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/blog\/how-to-calculate-leave-and-termination-payments-final-pay\/\" target=\"_blank\" rel=\"noopener\"><em>Final Pay in Australia: How to Calculate Leave and Termination Payments<\/em><\/a><\/span><\/p>\n<p aria-hidden=\"true\" data-edge=\"true\"><span style=\"color: #3366ff;\"><em><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/blog\/employment-termination-payments\/\" target=\"_blank\" rel=\"noopener\">A Guide to ETP (Employment Termination Payments)<\/a><\/em><\/span><\/p>\n<h3 aria-hidden=\"true\" data-edge=\"true\">Payroll Compliance &amp; Common Mistakes<\/h3>\n<p><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.workstem.com\/au\/blog\/7-common-payroll-mistakes-australian-employers-make-and-how-to-avoid-them\/\" target=\"_blank\" rel=\"noopener\"><em>7 Common Payroll Mistakes Australian Employers Make (and How to Avoid Them)<\/em><\/a><\/span><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Table of content What is redundancy?When does redundancy happen?What&#8217;s a genuine redundancy?How to calculate redundancy payment and entitlements?Redundancy case studyHow can Workstem assist you? What is redundancy? In Australia, redundancy refers to a situation where an employer terminates an employee&#8217;s employment because their position is no longer required or the business is downsising, for example,&#8230;<\/p>\n","protected":false},"author":5,"featured_media":627,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[41,46,42],"class_list":["post-626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-all","tag-payroll","tag-popular"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Ultimate Employee Redundancy Guide | Workstem<\/title>\n<meta name=\"description\" content=\"Master employee redundancy, practical strategies, and essential resources to navigate layoffs. 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