Redundancy Rights and Risks

jmhIf you are an employer faced with the difficult task of making employees redundant, it is important to know what obligations you have and what steps you ought to take to meet those obligations.

If you are an employee faced with redundancy, it’s important to know your rights and ensure you receive the correct entitlements.

What does redundancy mean?

A redundancy occurs when employment is terminated because the employer decides they no longer want that person’s job to be done by anyone, or because the employer becomes insolvent or bankrupt.

In order for a redundancy to be a ‘genuine redundancy’, it must be shown that:

  1. The job will not be done by anyone else and the position will not be filled by any other person.
  2. The requirements in the applicable modern award, enterprise agreement or industrial instrument to consult with the employee about the redundancy have been followed.

Redundancy pay

Redundancy pay may be up to 16 weeks of ordinary pay and is calculated upon the length of service. There is no legal requirement to pay redundancy pay to employees who have been employed for less than one year. Redundancy pay is paid in addition to any other entitlements, such as outstanding wages and accrued leave entitlements.

Steps to redundancy

Firstly, an employer ought to consider all options and alternatives to redundancy, like redeployment, job sharing and reduced overtime.

Secondly, an employer should meet with the employee who is to be made redundant to explain the situation and give him or her opportunity to ask questions.

Thirdly, written notice of the redundancy ought to be given to the employee.

Whether you are an employer or employee, Everingham Solomons will be more than happy to assist you with any employment queries because Helping You is Our Business.

Click here for more information on Jessica Simmonds.