legal rights of employees
When an employee is made redundant, they may be entitled to redundancy or severance pay. The amount due depends on the time spent with the company, the terms of employment, and size of the company. The employer must ensure that any redundancy is genuine, and involve the employee in the consultation process. The employer must also give the employee notice as set out in the NES or employment contract.
An employee may be entitled to redundancy or severance pay if:
- it is set out in a workplace instrument (for example, an award or agreement)
- the employee has worked for the organisation for more than 12 months’ continuous service (some exceptions apply)
- the business has 15 or more employees.
redundancy for small business
Under the NES, small businesses that employ fewer than 15 people at the time of redundancy are not required to provide redundancy pay. However, under certain contracts of employment and awards, employers are obligated to pay redundancy.
The website of the Fair Work Ombudsman includes details of what constitutes a ‘small business’ and a list of modern awards that require small businesses to pay redundancy.
consultation about the proposed redundancy
Whenever there is a ‘major workplace change’, such as redundancies, employers are obligated to carry out consultations with employees who are affected. Employees have the opportunity to raise any matters and seek measures to mitigate the proposed effects. Options for redeployment are part of the consultation if appropriate.