RedundancyWhat is a redundancy?Redundancy occurs when the work performed by an employee is no longer required to be done by anyone.
This can happen because:
the job is replaced by technology
the business is restructured and the job no longer exists
you can no longer afford to retain the employee due to economic circumstances.
There is a minimum scale of severance payments in most awards which is identical to that provided by the Employment Protection Act 1982. The Act applies to all permanent employees under NSW awards who work for an employer with more than 15 employees. Employers with less than 15 employees are exempt from these provisions.
Scale of Severance Payments
Continuous Service
Under 45 years
Weekly Pay
Over 45 years
Weekly pay
Less than one year
Nil
Nil
1 year but less than 2 years
4 weeks
5 weeks
2 years but less than 3 years
7 weeks
8.75 weeks
3 years but less than 4 years
10 weeks
12.5 weeks
4 years but less than 5 years
12 weeks
15 weeks
5 years but less than 6 years
14 weeks
17.5 weeks
6 years or more
16 weeks
20 weeks
The relevant state award or agreement can provide for greater entitlements than the Act, so make sure you pay the greater entitlement, if appropriate.
You are required by law to consult with your employees or their representatives when restructuring the workplace. Opportunities to discuss the changes and ways to avoid redundancy such as retraining, redeployment and counselling should be offered to your employees.