Your Guide to Redundancy

Being made redundant can be a challenging and stressful experience. If you've recently faced redundancy in Victoria, Australia, it's essential to understand your rights and entitlements, particularly regarding redundancy payments, unpaid annual leave, and long service leave. This blog post aims to provide you with a comprehensive guide to navigate through this period with relevant information on legislation and entitlements.

Understanding Redundancy

Redundancy occurs when an employer no longer requires an employee's job to be done by anyone, and it's crucial to note that it is not the same as dismissal due to performance or conduct issues.

Entitlements upon Redundancy

1. Redundancy Payments

The amount of redundancy pay an employee is entitled to is based on their period of continuous service with the employer, as specified in the NES (National Employment Standards) under the Fair Work Act 2009:

Period of Continuous Service

Redundancy Pay

At least 1 year but less than 2 years - 4 weeks’ pay

At least 2 years but less than 3 years - 6 weeks’ pay

At least 3 years but less than 4 years - 7 weeks’ pay

At least 4 years but less than 5 years - 8 weeks’ pay

At least 5 years but less than 6 years - 10 weeks’ pay

At least 6 years but less than 7 years - 11 weeks’ pay

At least 7 years but less than 8 years - 13 weeks’ pay

At least 8 years but less than 9 years - 14 weeks’ pay

At least 9 years but less than 10 years - 16 weeks’ pay

At least 10 years - 12 weeks’ pay

Eligibility:

• The employee must have been employed on a permanent basis (full-time or part-time).
• The employee must have completed at least 12 months of continuous service with the employer.
• Casual employees, apprentices, and trainees are generally not entitled to redundancy pay.
• Employers with fewer than 15 employees (small businesses) are generally exempt from paying redundancy.

2. Unpaid Annual Leave

According to the Fair Work Act 2009, when you are made redundant, you are entitled to receive a payout for any accrued but unused annual leave. This is a mandatory provision under the National Employment Standards (NES).

Section 90(2) of the Fair Work Act 2009 states: "If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee an amount equal to the amount that would have been payable to the employee in respect of that period of leave if the leave had been taken."

This means your employer must pay you for any unused annual leave as part of your final pay.

3. Long Service Leave

In Victoria, long service leave is governed by the Long Service Leave Act 2018 (Vic). If you have been with the same employer for an extended period, you may be entitled to long service leave even if your employment ends due to redundancy.

Section 10 of the Long Service Leave Act 2018 (Vic) provides: "An employee is entitled to long service leave on ordinary pay in respect of continuous employment with one employer, irrespective of the number of hours worked per week."

Under this Act, employees are entitled to:

• 8.6667 weeks of leave after 10 years of continuous service.
• Pro-rata long service leave after seven years of continuous service if employment ends for any reason, including redundancy.

4. Notice Period or Payment in Lieu of Notice

Employees are entitled to a notice period or payment in lieu of notice, as per the NES. The length of the notice period depends on the employee's length of service:

Period of Continuous Service

Notice Period

1 year or less - 1 weeks' pay

More than 1 year but less than 3 years - 2 weeks' pay

More than 3 years but less than 5 years - 3 weeks' pay

More than 5 years - 4 weeks' pay

• Employees over 45 years of age with at least two years of continuous service are entitled to an additional week of notice.

Exemptions and Reductions

Certain situations may exempt employers from paying redundancy or allow them to reduce the amount:

• Small Business Exemption: Employers with fewer than 15 employees are exempt from paying redundancy.
• Transfer of Employment: If an employee's job is transferred to a new employer and they continue their employment without significant changes, redundancy pay may not be required.
• Financial Hardship: Employers can apply to the Fair Work Commission to reduce the redundancy pay amount if they can demonstrate that the business cannot afford to pay the full amount.

Calculating Your Entitlements

To ensure you receive the correct payout for unpaid annual leave and long service leave, you can:

1. Review Your Employment Contract: Check for any clauses that might affect your entitlements.
2. Consult Your Employer's Policies: Some employers may offer more generous entitlements than the statutory minimum.
3. Seek Legal Advice: If you're unsure about your entitlements or believe you're not being fairly compensated, it might be beneficial to consult an employment lawyer or a union representative.

Steps to Take After Being Made Redundant

1. Request a Detailed Statement: Ask your employer for a detailed statement of your final pay, including the calculation of unpaid annual leave and long service leave.
2. File for Unemployment Benefits: If eligible, apply for unemployment benefits through Centrelink to support you during your job search.
3. Update Your Resume, Portfolio and LinkedIn Profile: Start networking and applying for new job opportunities.
4. Consider Further Training or Education: Use this time to upskill or explore new career paths.

Support Resources

• Fair Work Ombudsman: Provides information and assistance on workplace rights and entitlements. Visit Fair Work Ombudsman or call 13 13 94.
• JobWatch: A community legal centre that provides advice to Victorian workers. Visit JobWatch or call 1800 331 617.
• Centrelink: For unemployment benefits and financial support. Visit Centrelink or call 13 24 68.

Conclusion

Facing redundancy can be daunting, but knowing your rights and entitlements can help you navigate this challenging time more effectively. Ensure you receive your due entitlements, including redundancy payments, unpaid annual leave, and long service leave, and take proactive steps to secure your future employment.

If you have any questions or need further assistance, don't hesitate to reach out to me or to any of the resources mentioned above. Remember, you have rights and support is available to you during this time.