The amount of redundancy pay under the NES equals the total amount payable to the employee for the redundancy pay period. This is worked out using the table below, at the employee's 'base rate of pay' for his or her ordinary hours of work.
An employee's base rate of pay (other than a pieceworker) is the rate of pay payable to an employee for his or her ordinary hours of work, but not including any of the following:
- incentive-based payments and bonuses
- monetary allowances
- overtime or penalty rates
any other separately identifiable amounts..
Redundancy pay is generally not payable under the in any of the following circumstances:
- an employee whose period of continuous service with the employer is less than 12 months
- an employee employed for a specified period of time, for a specified task, or for the duration of a specified season
- a casual employee
- an apprentice
- an employee of a small business employer (see the Redundancy & small business section)
- an employee to whom a industry-specific redundancy scheme in a modern award applies
An employee may have a redundancy entitlement or severance pay if any of the following applies. Note you should always check with the current legislation or your lawyer to confirm potential entitlement to redundancy pay:
- a workplace instrument (e.g. an award or agreement) that applies to the employee contains redundancy pay entitlements
- the employee works for an employer that employs 15 or more employees and has more than 12 months continuous service (some exceptions apply).
- If an agreement that included redundancy provisions was terminated in a certain way less than 2 years ago and the employees covered by that agreement aren’t covered by a new agreement, the old redundancy provisions may still apply. .
If a dismissal is a genuine redundancy it will not be an unfair dismissal. The definition of what the Commonwealth workplace laws determines as genuine is if:
- the employer no longer needs the person’s job to be done by anyone because of changes in the operational requirements of the business, and
- the employer followed any consultation requirements in the modern award, enterprise agreement or other industrial instrument that applies.
A dismissal is not a genuine redundancy if it would have been reasonable in the circumstances for the employee to be redeployed within the employer’s enterprise or an associated entity.