How to make a position redundant

Q: I am planning to make some changes to the structure of my business and will probably need to make a position redundant. I am unsure of what entitlements my employee should receive. Could you assist?

A: Information relating to employer redundancy obligations starts at Section 117 of the Fair Work Act 2009 (the Act).

Essentially, employers must provide an employee whose position is being made redundant notice of the termination along with a redundancy payment. Notice of termination is outlined in the table in Section 117 (3)(a) of the Act and ranges from one week to four weeks dependent on the employee’s length of continuous service. Remember to add an additional one week for any employee who is over 45 years of age and who has been employed continuously for at least two years at the time the notice is given.

The redundancy payment is outlined in Section 119 (2) of the Act and ranges from four weeks to 16 weeks dependent on the employee’s length of continuous service. Note, the Act sets out the minimum entitlement to redundancy pay, and some employers may like to pay over and above this amount.

Note, if your employees are covered by an industrial instrument other than the Fair Work Act 2009 such as an Enterprise Agreement, employers will need to refer to that document.

On a final note we wish to remind employers that redundancy processes can be very complex and if executed poorly can have negative impacts on your business and its culture. Therefore, Industryus HR strongly advises employers seek external advice from a HR professional prior to carrying out redundancies.

Call us on 07 5655 4047 or click here if you require assistance.

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