Tag: redundancy
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Redundancy entitlements
Q: I no longer need one of my team members. What do I have to pay in the case of a redundancy?
A: Information relating to employer redundancy obligations starts at Section 117 of the Fair Work Act 2009 (the Act).
Basically, 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 minimum redundancy payment is outlined in Section 119 (2) of the Act and ranges from zero weeks to 16 weeks dependent on the employee’s length of continuous service and the size of the organisation.
Note, if your employees are covered by an industrial instrument other than the Fair Work Act 2009, such as an Enterprise Agreement, you will need to refer to that document for correct entitlements. Also, where the individual’s employment agreement states an entitlement over the minimum standard, you will need to ensure they receive the higher amount.
Redundancy processes can be very complex and if executed poorly (or unlawfully), they can have negative consequences. 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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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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Post redundancy support
Q. I am planning to make a position redundant soon but I am concerned that the long term employee who is in the role won’t cope with the news. I need help with redundancy, particularly following the redundancy.
A: Being retrenched is a significant life event for many people. How a person reacts and copes with the change will depend on a number of factors including their personality, their personal circumstances, their current and future goals, their confidence level and their tenure with the business, to name just a few.
As redundancy is usually a big deal, the most responsible approach for employers to take is to organise outplacement for the departing employee.
Outplacement counselling sessions are usually facilitated by a third party and provide guidance and support for employees to manage the transition from redundancy to a new employer. Topics discussed at sessions usually include career guidance and evaluation, resume writing, job search skills, interview preparation and other important topics that assist in a successful transition to a new employer post redundancy.
If you are planning to make a position redundant in the future, call Industryus HR for help with redundancy on 07 5655 4047 for a free, no obligation Introductory Call where we can check if your plans are compliant with legislation and we can also take you through outplacement options. Or visit our Redundancy and Outplacement page.