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Document Id notice_of_termination_and_redundancy_pay.pdf
Document Title Notice Of Termination And Redundancy Pay
Reference https://drive.google.com/uc?export=download&id=14f9FISV72KQSDMg1-notlJC6WMkbJbDo
Publisher Fair Work Ombudsman
Categorization Human Resource Management HR Compliance & Legal Management
Document Source 9943 characters in 0 pages. (pdf)
Tags termination, redundancy pay, employment standards, notice period, employee rights
This document outlines the regulations regarding notice of termination and redundancy pay as part of the National Employment Standards (NES) in Australia. It is intended for employees and employers within the national workplace relations system. The NES stipulates the minimum notice period an employer must provide when terminating an employee's employment, as well as the conditions under which redundancy pay is applicable. Key points include the required notice periods based on the length of service, exceptions to notice requirements, and the calculation of redundancy pay based on continuous service. The document also addresses the implications of bankruptcy or liquidation for employees and provides contact information for further assistance from the Fair Work Ombudsman.
The document provides a comprehensive overview of the notice of termination and redundancy pay as mandated by the National Employment Standards (NES) in Australia. It serves as a guide for both employees and employers, detailing the minimum entitlements regarding termination notice and redundancy pay. The NES applies to all employees under the national workplace relations system, excluding casual workers and certain other categories. ### Notice of Termination Employers are required to give written notice to employees when terminating their employment. The notice can be delivered personally, sent to the employee's last known address, or sent electronically if agreed upon. The document specifies the minimum notice periods based on the employee's length of service: - 1 week for up to 1 year of service - 2 weeks for more than 1 year but up to 3 years - 3 weeks for more than 3 years but up to 5 years - 4 weeks for more than 5 years Additionally, employees over 45 years old with at least 2 years of service are entitled to an extra week of notice. However, certain employees, such as casual workers or those dismissed for serious misconduct, are exempt from receiving notice. ### Redundancy Redundancy occurs when an employer no longer requires a position to be filled, often due to business changes such as technological advancements or financial difficulties. Employees are entitled to redundancy pay based on their continuous service, calculated at their base pay rate. The redundancy pay scales are as follows: - 4 weeks for 1 year of service - 6 weeks for 2 years - 8 weeks for 4 years - 12 weeks for 10 years, with a reduction from 16 weeks for those with 10 years of service. Certain employees, including those with less than 12 months of service or employed on a fixed-term basis, do not qualify for redundancy pay. Small businesses, defined as those with fewer than 15 employees, also have different obligations regarding redundancy. ### Bankruptcy and Employee Rights In cases of employer bankruptcy or liquidation, employees may be eligible for assistance through the Fair Entitlements Guarantee (FEG), which covers unpaid wages, annual leave, and redundancy pay up to specified limits. The document emphasizes the importance of understanding one’s rights and entitlements under the NES and provides contact information for the Fair Work Infoline for further assistance. Overall, this document serves as a vital resource for understanding the legal framework surrounding termination and redundancy in the Australian workplace, ensuring that both employees and employers are informed of their rights and responsibilities.

Original content extracted from the source document.

Notice of termination & redundancy pay

Overview

Notice of termination and redundancy pay form part of the National Employment Standards (NES). The NES apply to all employees covered by the national workplace relations system, regardless of any award, agreement or contract.

The NES establish the minimum entitlement to the notice period, or payment in lieu of notice, that an employer must give an employee to end their employment. This applies to all employees (other than casuals), not just those covered by the national workplace relations system.

The NES also outline the redundancy pay an employee may receive at the end of their employment. This entitlement only applies to employees covered by the national workplace relations system.

Notice of termination

An employer must provide an employee with written notice of the day of termination when ending their employment. Some exceptions apply (see below).

An employer may give notice to the employee by either:

  •  delivering it personally
  •  leaving it at the employee's last known address
  •  sending it by pre-paid post to the employee's last known address
  •  if the employee agrees, sending it electronically by email or text message.

An employee may also need to give their employer notice of termination if their award or enterprise agreement specifies it.

What amount of nofice must be given?

An employer must not dismiss an employee unless they have either:

  •  given the minimum period of notice
  •  paid the employee instead of giving notice. This is paid at the employee's full pay rate as if they had worked the minimum notice period.

Fair Work Infoline: 13 13 94

An employee's full pay rate includes the following:

  •  incentive-based payments and bonuses
  •  loadings
  •  monetary allowances
  •  overtime or penalty rates
  •  any other separately identifiable amounts.

| Period of continuous service | Minimum notice period | |--------------------------------|--------------------------| | 1 year or less | 1 week | | More than 1 year - 3 years | 2 weeks | | More than 3 years - 5 years | 3 weeks | | More than 5 years | 4 weeks |

Employees over 45 years old who have completed at least 2 years of service when they receive notice are given an additional week of notice.

Does nofice of terminafion apply to all employees?

Under the NES, an employer does not need to provide notice of termination (or payment in lieu of notice) to employees who:

  •  are casual
  •  are employed for a set period of time or a season (for example, a fixed term contract or a seasonal fruit picker)
  •  are fired because of serious misconduct (for example, engaging in theft, fraud, sexual harassment or assault)
  •  have a training arrangement and are employed for a set period of time or for the length of the training arrangement (other than an apprentice)
  •  are daily hire working in the building and construction industry or the meat industry in connection with the slaughter of livestock
  •  are weekly hire working in connection with the meat industry and whose termination depends on seasonal factors (but not where termination is due to other reasons).

An award or enterprise agreement may have different notice provisions for daily hire employees which could apply instead of those listed above.

An apprentice gets notice of termination, unless they're:

  •  employed for a set period of time, or
  •  fired for serious misconduct.

It can help to look at an employee's employment contract to see if they've been employed for a set period of time.

Redundancy

Redundancy occurs when an employer either decides they no longer need an employee's job to be done by anyone, or the employer becomes insolvent or bankrupt, and terminates their employment.

The job itself, not the employee, becomes redundant. Redundancy can happen when the business:

  •  introduces new technology (for example, the job can be done by a machine)
  •  slows down due to lower sales or production
  •  closes down
  •  relocates interstate or overseas
  •  restructures or reorganises because a merger or takeover happens.

What redundancy pay is payable?

Employees receive redundancy pay based on their continuous period of service with their employer. This amount is paid at the employee's base pay rate for ordinary hours worked.

An employee's base rate of pay (other than a pieceworker) is the pay rate they receive for working their ordinary hours, but does not include the following:

  •  incentive-based payment and bonuses
  •  loadings
  •  monetary allowances
  •  overtime or penalty rates
  •  any other separately identifiable amounts.

Fair Work Infoline: 13 13 94

| Period of continuous service | Redundancy pay | |---------------------------------------------|------------------| | At least 2 years 1 year but less than | 4 weeks | | At least 3 years 2 years but less than | 6 weeks | | At least 4 years 3 years but less than | 7 weeks | | At least 5 years 4 years but less than | 8 weeks | | At least 6 years 5 years but less than | 10 weeks | | At least 7 years 6 years but less than | 11 weeks | | At least 8 years 7 years but less than | 13 weeks | | At least 9 years 8 years but less than | 14 weeks | | At 10 least 9 years years but less than | 16 weeks | | At least 10 years | 12 weeks* |

*There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least 10 years continuous service. This is consistent with the 2004 Redundancy Case decision made by the Australian Industrial Relations Commission.

Reducing redundancy pay

An employer can apply to the Fair Work Commission to have the amount of redundancy they have to pay reduced if:

  •  the employer finds other acceptable employment for the employee, or
  •  the employer can't afford the full redundancy amount.

Does redundancy pay apply to all employees?

Some employees don't get redundancy pay when their job is made redundant.

The following employees don't get redundancy pay:

  •  employees whose period of continuous service with the employer is less than 12 months
  •  employees who are employed for a set period of time, or a season
  •  employees who are dismissed because of serious misconduct
  •  most casual employees
  •  trainees engaged only for the length of the training agreement
  •  apprentices
  •  most employees of a small business.

What is a small business?

A small business employer, for the purpose of determining redundancy pay, is an employer who employs fewer than 15 employees at the time when notice is given.

To determine whether the employer has fewer than 15 employees, the following factors need to be considered:

  •  all employees employed by the employer at that time are to be counted
  •  a casual employee is not to be counted unless, at that time, they have been employed on a regular and systematic basis
  •  associated entities are taken to be one entity
  •  the employee being dismissed and any other employees being dismissed at that time are counted.

A non-small business can become a small business as part of the process of downsizing its workforce. This can be due to insolvency in the period leading up to (or after) becoming bankrupt, or going into liquidation. Non-small business employers that become a small business employer in these circumstances may still be required to pay their employees redundancy pay.

An award or enterprise agreement may have different redundancy provisions which could apply instead of those listed above. These provisions, such as industry-specific redundancy schemes, can override the listed exceptions.

To check which award you're covered by use our Award Finder at fairwork.gov.au/findmyaward

CONTACT US

Fair Work online: www.fairwork.gov.au

Fair Work Infoline:

13 13 94

Need language help?

Contact the Translafing and Interprefing Service (TIS) on 13 14 50

What happens if my employer goes bankrupt or into liquidation?

Sometimes businesses shut down because they aren't profitable or run out of money. This can mean that employees lose their jobs, and in some cases, the employer may not be able to pay them the wages and entitlements they are owed.

When a business is bankrupt, also known as going into liquidation or insolvency, employees can get help through the Fair Entitlements Guarantee (FEG).

The FEG is available to eligible employees to help them get their unpaid entitlements.

This can include:

  •  wages - up to 13 weeks unpaid wages (capped at the FEG maximum weekly wage)
  •  annual leave
  •  long service leave
  •  payment in lieu of notice of termination maximum of 5 weeks
  •  redundancy pay - up to 4 weeks per full year of service.

It doesn't include:

  •  superannuation
  •  reimbursement payments
  •  one-off or irregular payments
  •  bonus payments
  •  non-ongoing or irregular commission.

For more information visit the Department of Employment and Workplace Relations FEG webpage at dewr.gov.au/fair-entitlements-guarantee or call the FEG Hotline on 1300 135 040.

Hearing & speech assistance

Call through the Nafional Relay Service (NRS):

For TTY: 13 36 77

Ask for the Fair Work Infoline 13 13 94

Speak & Listen:

1300 555 727

Ask for the Fair Work Infoline 13 13 94

The Fair Work Ombudsman is commifted to providing you with advice that you can rely on. The informafion contained in this fact sheet is general in nature. If you are unsure about how it applies your situafion you can call our Infoline on 13 13 94 or speak with a union, industry associafion or a workplace relafions professional. to

Fair Work Infoline: 13 13 94

Last updated: February 2024 © Copyright Fair Work Ombudsman

Chunk 0 from Page 1 (Overview)

Notice of termination and redundancy pay form part of the National Employment Standards (NES). The NES apply to all employees covered by the national workplace relations system, regardless of any award, agreement or contract. The NES establish the minimum entitlement to the notice period, or payment in lieu of notice, that an employer must give an employee to end their employment. This applies to all employees (other than casuals), not just those covered by the national workplace relations system. The NES also outline the redundancy pay an employee may receive at the end of their employment. This entitlement only applies to employees covered by the national workplace relations system.

Chunk 1 from Page 1 (Notice of termination)

An employer must provide an employee with written notice of the day of termination when ending their employment. Some exceptions apply (see below). An employer may give notice to the employee by either:

  •  delivering it personally
  •  leaving it at the employee's last known address
  •  sending it by pre-paid post to the employee's last known address
  •  if the employee agrees, sending it electronically by email or text message. An employee may also need to give their employer notice of termination if their award or enterprise agreement specifies it.
Chunk 2 from Page 1 (What amount of nofice must be given?)

An employer must not dismiss an employee unless they have either:

  •  given the minimum period of notice
  •  paid the employee instead of giving notice. This is paid at the employee's full pay rate as if they had worked the minimum notice period. Fair Work Infoline: 13 13 94 An employee's full pay rate includes the following:
  •  incentive-based payments and bonuses
  •  loadings
  •  monetary allowances
  •  overtime or penalty rates
  •  any other separately identifiable amounts. 1 year or less, Minimum notice period = 1 week. More than 1 year - 3 years, Minimum notice period = 2 weeks. More than 3 years - 5 years, Minimum notice period = 3 weeks. More than 5 years, Minimum notice period = 4 weeks Employees over 45 years old who have completed at least 2 years of service when they receive notice are given an additional week of notice.
Chunk 3 from Page 1 (Does nofice of terminafion apply to all employees?)

Under the NES, an employer does not need to provide notice of termination (or payment in lieu of notice) to employees who:

  •  are casual
  •  are employed for a set period of time or a season (for example, a fixed term contract or a seasonal fruit picker)
  •  are fired because of serious misconduct (for example, engaging in theft, fraud, sexual harassment or assault)
  •  have a training arrangement and are employed for a set period of time or for the length of the training arrangement (other than an apprentice)
  •  are daily hire working in the building and construction industry or the meat industry in connection with the slaughter of livestock
  •  are weekly hire working in connection with the meat industry and whose termination depends on seasonal factors (but not where termination is due to other reasons). An award or enterprise agreement may have different notice provisions for daily hire employees which could apply instead of those listed above. An apprentice gets notice of termination, unless they're:
  •  employed for a set period of time, or
  •  fired for serious misconduct. It can help to look at an employee's employment contract to see if they've been employed for a set period of time.
Chunk 4 from Page 2 (Redundancy)

Redundancy occurs when an employer either decides they no longer need an employee's job to be done by anyone, or the employer becomes insolvent or bankrupt, and terminates their employment. The job itself, not the employee, becomes redundant. Redundancy can happen when the business:

  •  introduces new technology (for example, the job can be done by a machine)
  •  slows down due to lower sales or production
  •  closes down
  •  relocates interstate or overseas
  •  restructures or reorganises because a merger or takeover happens.
Chunk 5 from Page 2 (What redundancy pay is payable?)

Employees receive redundancy pay based on their continuous period of service with their employer. This amount is paid at the employee's base pay rate for ordinary hours worked. An employee's base rate of pay (other than a pieceworker) is the pay rate they receive for working their ordinary hours, but does not include the following:

  •  incentive-based payment and bonuses
  •  loadings
  •  monetary allowances
  •  overtime or penalty rates
  •  any other separately identifiable amounts. Fair Work Infoline: 13 13 94
Chunk 6 from Page 2 (What redundancy pay is payable?)

At least 2 years 1 year but less than, Redundancy pay = 4 weeks. At least 3 years 2 years but less than, Redundancy pay = 6 weeks. At least 4 years 3 years but less than, Redundancy pay = 7 weeks. At least 5 years 4 years but less than, Redundancy pay = 8 weeks. At least 6 years 5 years but less than, Redundancy pay = 10 weeks. At least 7 years 6 years but less than, Redundancy pay = 11 weeks. At least 8 years 7 years but less than, Redundancy pay = 13 weeks. At least 9 years 8 years but less than, Redundancy pay = 14 weeks. At 10 least 9 years years but less than, Redundancy pay = 16 weeks. At least 10 years, Redundancy pay = 12 weeks* *There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least 10 years continuous service. This is consistent with the 2004 Redundancy Case decision made by the Australian Industrial Relations Commission.

Chunk 7 from Page 2 (Reducing redundancy pay)

An employer can apply to the Fair Work Commission to have the amount of redundancy they have to pay reduced if:

  •  the employer finds other acceptable employment for the employee, or
  •  the employer can't afford the full redundancy amount.
Chunk 8 from Page 2 (Does redundancy pay apply to all employees?)

Some employees don't get redundancy pay when their job is made redundant. The following employees don't get redundancy pay:

  •  employees whose period of continuous service with the employer is less than 12 months
  •  employees who are employed for a set period of time, or a season
  •  employees who are dismissed because of serious misconduct
  •  most casual employees
  •  trainees engaged only for the length of the training agreement
  •  apprentices
  •  most employees of a small business.
Chunk 9 from Page 3 (What is a small business?)

A small business employer, for the purpose of determining redundancy pay, is an employer who employs fewer than 15 employees at the time when notice is given. To determine whether the employer has fewer than 15 employees, the following factors need to be considered:

  •  all employees employed by the employer at that time are to be counted
  •  a casual employee is not to be counted unless, at that time, they have been employed on a regular and systematic basis
  •  associated entities are taken to be one entity
  •  the employee being dismissed and any other employees being dismissed at that time are counted. A non-small business can become a small business as part of the process of downsizing its workforce. This can be due to insolvency in the period leading up to (or after) becoming bankrupt, or going into liquidation. Non-small business employers that become a small business employer in these circumstances may still be required to pay their employees redundancy pay. An award or enterprise agreement may have different redundancy provisions which could apply instead of those listed above. These provisions, such as industry-specific redundancy schemes, can override the listed exceptions.
Chunk 10 from Page 3 (What is a small business?)

To check which award you're covered by use our Award Finder at fairwork.gov.au/findmyaward

Chunk 11 from Page 3 (CONTACT US)

Fair Work online: www.fairwork.gov.au Fair Work Infoline: 13 13 94 Need language help? Contact the Translafing and Interprefing Service (TIS) on 13 14 50

Chunk 12 from Page 3 (What happens if my employer goes bankrupt or into liquidation?)

Sometimes businesses shut down because they aren't profitable or run out of money. This can mean that employees lose their jobs, and in some cases, the employer may not be able to pay them the wages and entitlements they are owed. When a business is bankrupt, also known as going into liquidation or insolvency, employees can get help through the Fair Entitlements Guarantee (FEG). The FEG is available to eligible employees to help them get their unpaid entitlements.

Chunk 13 from Page 3 (This can include:)
  •  wages - up to 13 weeks unpaid wages (capped at the FEG maximum weekly wage)
  •  annual leave
  •  long service leave
  •  payment in lieu of notice of termination maximum of 5 weeks
  •  redundancy pay - up to 4 weeks per full year of service.
Chunk 14 from Page 3 (It doesn't include:)
  •  superannuation
  •  reimbursement payments
  •  one-off or irregular payments
  •  bonus payments
  •  non-ongoing or irregular commission. For more information visit the Department of Employment and Workplace Relations FEG webpage at dewr.gov.au/fair-entitlements-guarantee or call the FEG Hotline on 1300 135 040.
Chunk 15 from Page 3 (Hearing & speech assistance)

Call through the Nafional Relay Service (NRS): For TTY: 13 36 77 Ask for the Fair Work Infoline 13 13 94 Speak & Listen: 1300 555 727 Ask for the Fair Work Infoline 13 13 94 The Fair Work Ombudsman is commifted to providing you with advice that you can rely on. The informafion contained in this fact sheet is general in nature. If you are unsure about how it applies your situafion you can call our Infoline on 13 13 94 or speak with a union, industry associafion or a workplace relafions professional. to Fair Work Infoline: 13 13 94 Last updated: February 2024 © Copyright Fair Work Ombudsman

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