Survival Guide To Redundancy

Covid-19 is a scary situation. Even scarier is when you have to deal with a job redundancy in the current financial climate. Not to worry, though. We have your back with a survival guide: All the information you need to get through this current crisis and come out stronger and sharper.

You Have Entitlements

Two words are very important here – Severance Pay. Think of it like a life vest. When you are laid off, you are owed a particular amount from your employer. The severance pay helps you tide over until you find new work. And there’s more. You are also entitled to a notice of termination, payment of annual leave, banked RDO to name a few.

Now pay close attention to the next few words: the amount you receive as redundancy pay, termination notice, and other statutory entitlements vary from industry to industry. What does not vary is that employers are obligated, by law, to pay the full severance pay and all entitlements. If they don’t, a legal dispute and hefty fines wait for them with open arms.

9 Step Survival Guide To Redundancy

If you have been made redundant, tough luck. But here’s what you can do

1. Check whether the redundancy is genuine

Redundancy may be a first time experience for you; as it is for most people in these difficult times. You have to understand the difference between being dismissed, stood down, and made redundant. The difference in the term used can be the difference in the entitlements you receive. If this all sounds confusing, don’t worry, it is very simple. Ready, here we go…

Employees who are stood down are still employed but without pay or any entitlements. This is according to the Fair Work Act. All you can do is weather the storm and wait for the employer to call you back.

A stand-down can turn into a redundancy when the employee has been out for work for a length of time.

Now let’s understand redundancy and dismissal. Both can mean the same thing.  According to the Fair Work Ombudsman, you are made redundant when the employer doesn't need your skillset, or when the company becomes insolvent or bankrupt. It's not redundancy if the workload has reduced because of COVID-19, or the job is given to another employee in the organization.

Still with us? Good.

The most important thing you need to know is that redundancy that occurs during COVID-19 may not be a genuine redundancy. In that case, you can make an unfair dismissal or supporting a legal claim. Many dismissal-related claims have very short timeframes, such as 21 days. It is imperative then that you seek legal advice and quick.

2. Did you get enough notice?

Let’s try and understand what 'payment in lieu of notice' means.

The government rules around notice payments haven't changed because of COVID-19. On redundancy, the employer should give you due notice depending on how long you've been with the company. Here’s an example to help you better understand:

If you've been employed for less than a year, the Fair Work Act requires your employer a week's notice. For one to three years, you should get two weeks' notice and for over five years, you should get four weeks.

There's a special ruling for those over 45 years of age and have been working for the same company for more than two years. You are then eligible for a longer notice.

The takeaway is that if an employer made you redundant on the same day of the notice, you are eligible for a 'notice payment' equivalent to how long you've worked for the business.

3. Check that you are paid your leave entitlements, particularly long service leave

The easy way to do this is to check your most recent payslip. If it is missing, clarify with your employer or your payroll officer. Note: You can't claim to pay for unused sick leave; only for annual leave accrued and long service leave if you've worked for the same company for a long period of time. Here’s an example:

You get eight weeks' worth of your salary for more than 10 years of continued service with the same employer and four weeks for more than five years of employment.

4. Check your redundancy pay entitlements

You are eligible to receive entitlements in addition to severance pay, unpaid annual leave days, and long service leave. This is based on your employment tenure with the organization. There are, however, exemptions.

Employers are not required to pay redundancy entitlements for a casual worker, an apprentice, or an employee who has worked for less than a year. Small businesses, or those with less than 15 employees, are not required to provide redundancy pay to their staff.

Because of COVID-19, some companies might apply to the Fair Work Commission to reduce the redundancy paid to employees. In this unfortunate scenario, you might lose part, or all, of the redundancy entitlements. The silver lining here is that the decision depends on the Fair Work Commission approving the employer's submission. This is handled on a case-by-case basis.

5. Know your superannuation entitlements

Superannuation entitlements are available when you reach retirement age. But the government has lifted the restrictions, temporarily, to help you better deal with the current pandemic. Provided you meet eligibility requirements, you can withdraw as much as $20,000 from your super fund in two lots of $10,000 each. This benefit is provided if you need urgent financial assistance.

Your latest payslip, once again, holds the key. Two things are important:

? Any superannuation contributions paid for the employee's benefit, including the number of contributions made during the pay period (or the number of contributions that need to be made).

? And the name, or the name and number, of the superannuation fund the contributions were made to.

To claim, contact your super fund immediately after you receive the notice of redundancy. This ensures that you can make insurance claims, or remain eligible for the superannuation benefits.

Important Note: The income protection cover in your super fund does not currently cover being made redundant due to COVID-19. The silver lining here is that the practice has been updated. Super funds now require a dedicated section on COVID-19 and how it impacts their fund members.

6. If your employer files for bankruptcy, you may get financial assistance under the Fair Entitlements Guarantee (FEG) scheme

If the organization you work for has gone under, they may not be able to pay redundancy entitlements or even your remaining payments. You need not worry because the Fair Entitlements Guarantee (FEG) can turn superhero and save your day.

The FEG is a government scheme that offers financial assistance to cover certain unpaid entitlements to eligible employees of bankrupt companies. Under the scheme, you may be able to claim for unpaid wages up to 13 weeks, your unpaid annual leave and long service leave, payment in lieu of notice up to five weeks, and redundancy pay up to four weeks per full year of service.

7. Check if you are eligible for government benefits

Government benefits act as another shield against tough economic conditions. Major changes have been made to  Centrelink benefits, including providing immediate financial support for those who lost their job with little or no notice. To access these benefits, you need to create or be a registered user of a MyGov account. The MyGov site is the centralized platform to access all government services, including Centrelink benefits.

COVID-19 has not changed the law relating to redundancy but it may change legal outcomes. Before making an employee redundant, employers must consider whether the employee can be redeployed elsewhere in the business or in an associated business. Employers may also need to consult with employees about the redundancy.

8. Get free legal advice

Due to COVID-19, Legal Aid is offering free help to tackle employment problems, social security entitlements, family law issues, or parenting problems. Legal Aid is available nationally. Contact your local Legal Aid office for more information.

9. Can your employer hire you again?

Yes.

The JobKeeper subsidy program has enabled many small businesses re-hire staff they made redundant shortly after the imposed restrictions on social gatherings and non-essential travel. Do keep in mind that when you are re-hired, you start from zero: This includes annual leave entitlements and period of employment.

Two important Questions

1.   What if I am asked to change my hours?

Whether an employer can legally ask you to change your hours depends on your employment contract, enterprise agreement, or modern award. You must be given due notice before the request is made. Now if the employer requests reduced hours, you can:

? Agree to work fewer hours. Due notice is required and regular wages are paid during the notice period. In case your employer wants to cut your hours immediately, they must pay you for the notice they should have given you. The amount of notice depends again on your employment contract, enterprise agreement, or modern award.

? Refuse to work fewer hours. Your employer might accept your decision, or they might make your job redundant.

Your employer cannot cut your hours or ill-treat you because:

? You took personal (sick) leave because of the COVID-19 coronavirus.

? You stood up for your rights, like asking for a safe workplace or asking to be paid.

The Fair Work Commission offers a  ‘general protections dispute’ when working hours are reduced unfairly. Get legal advice too.

2.   What if I am asked to take leave without pay?

In other words, you are stood down. Your employer is not firing you. They are asking you to stop work until a new opportunity arises. Being stood down is temporary.

You can be stood down when all the below conditions are met:

? You are not on paid leave approved by your employer, such as personal (sick) leave, or annual leave.

? The employer cannot control the situation. For example, if the business must close because of the COVID-19 coronavirus.

? They follow the rules in your employment contract, enterprise agreement, or modern award when requesting you to stand down.

 If your employer wants to stand you down and the stand-down is lawful, you can choose to resign. Your employer must then pay you the entitlements you are due, like annual leave, or long service leave.

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Disclaimer: All the information in this article is for general information only. You should consider seeking independent legal advice to check on how this information relates to your unique circumstances.