How to make sure you get what you're owed when made redundant
Redundancies are the worst in the best of times but even more so during a pandemic. If you have been made redundant or concerned your employer might not survive the disruption caused by the coronavirus outbreak, here's what you need to know:
1. Check that the redundancy is genuine
For many people, this will be the first time you have to understand the difference between being dismissed, being stood down or being made redundant. While it's easy to use these terms interchangeably, your entitlements will vary depending on which takes place.
By law, being stood down is fundamentally different to being made redundant.
Stood down employees are still employed whereas employees who are made redundant have been dismissed.
If you are properly stood down under the Fair Work Act, you are still employed. You have no entitlements, you just have to wait until the employer says that work is back on.
The answer to when a stand down might become a redundancy because the employee has been out of work for so long will depend on the facts of each case.
According to the Fair Work Ombudsman, you can be made redundant when your employer doesn't need your job to be done by anyone, or when the company becomes insolvent or bankrupt. It's not a redundancy if the workload has fallen because of COVID-19 or the job you have been hired to do is given to someone else in the company.
"The most important thing that workers need to know is that just because a redundancy occurs during COVID-19, it is not automatically a genuine redundancy," Bridget Akers, senior solicitor at Legal Aid NSW, tells Money.
"Workers who have been made redundant and who think that the redundancy was not genuine may be able to make an unfair dismissal or other type of legal claim. Many dismissal related claims have very short timeframes, such as 21 days. If workers have been dismissed, it is important that they seek legal advice quickly," she says.
2. Did you get enough notice? Understand what 'payment in lieu of notice' means.
The government rules around notice payments haven't changed because of COVID-19. That means if you were made redundant, the employer should give you due notice depending on how long you've been with the company.
For example, if you've been employed for less than a year, the Fair Work Act requires your employer a week's notice. For one to three years, you should get two weeks' notice and for over five years, you should get four weeks.
There's a special ruling for those over 45 and have been working for the same company for more than two years. You are eligible for an additional week's notice.
This means if an employer made you redundant on the same day of the notice, then you are eligible for a 'notice payment' equivalent to how long you've worked for the business.
3. Check that you are paid your leave entitlements, particularly long service leave
A quick way to check this is through your most recent pay slip. It is not mandatory for employers to include leave entitlements on payslips so if this is missing, check with your employer or your payroll officer. Note that you can't claim pay for unused sick leave, only for annual leave accrued and long service leave if you've worked for the same company for a long period of time.
For example, you get eight weeks' worth of your salary for more than 10 years of continued service with the same employer and four weeks for more than five years of employment.
4. Check your redundancy pay entitlements
This is on top of your unpaid or outstanding annual leave days and long service leave. The amount of redundancy pay entitlement you get is based on the length of time you have worked continuously with the same company.
There are exemptions. Employers are not required to pay redundancy entitlements for a casual worker, an apprentice or employed for less than a year. Small businesses or those with less than 15 employees are not required to provide redundancy pay to their staff.
Akers said that because of the number of redundancies that are likely to arise because of COVID-19, some companies might apply to the Fair Work Commission to reduce the amount of redundancy pay to be paid to employees.
In this unfortunate scenario, employees that are made redundant might lose part of, or all of, their redundancy entitlements. However, this all depends on the Fair Work Commission approving the employer's submission. These are handled on a case-by-case basis.
5. Know your superannuation entitlements
While superannuation contributions are a separate matter to your redundancy entitlements, the pandemic has forced the government to temporarily lift the restrictions on accessing your super before you are of retirement age. Provided you meet eligibility requirements, you can withdraw as much as $20,000 from your super fund in two lots of $10,000 if you need urgent financial assistance to cover your financial commitments.
Your latest payslip will provide you with the information you need to find out what you're entitled to. The two things to look for are:
- any superannuation contributions paid for the employee's benefit, including the amount of contributions made during the pay period (or the amount of contributions that need to be made)
- and the name, or the name and number, of the superannuation fund the contributions were made to.
You should also contact your super fund immediately after you've been made redundant to ensure you can still make insurance claims or remain eligible for your superannuation benefits while you don't have a job and can't make your regular superannuation contributions.
Unfortunately, your income protection cover under your super fund does not cover being made redundant due to COVID-19. Check with your super fund or check their website. It's now become standard practice for super funds to have a dedicated section on COVID-19 and how it impacts their fund members.
6. If your employer files for bankruptcy, you might be able to get financial assistance under the Fair Entitlements Guarantee scheme
Not all businesses will go under liquidation because of COVID-19 but if a company has been made insolvent and they cannot pay your redundancy entitlements or even your remaining pay, you may be eligible for some financial compensation under the Fair Entitlements Guarantee (FEG).
It is a government scheme that offers financial assistance to cover certain unpaid employment entitlements to eligible employees who lost their job due to the liquidation or bankruptcy of their employer.
Under FEG, you may be able to claim for your unpaid wages (up to 13 weeks), your unpaid annual leave and long service leave, payment in lieu of notice (up to five weeks) and redundancy pay (up to four weeks) per full year of service.
The claim can be made online.
7. Check if you are eligible for government benefits
In response to the coronavirus outbreak, the government has made some major changes to Centrelink benefits, including providing immediate financial support for those who lost their job with little or no notice.
If you haven't already done so, you need to create a MyGov account to access those benefits without too many hassles. The MyGov site is the centralised platform to access all government services, including Centrelink benefits.
The key date is March 20, 2020, which is the date that the newly launched JobSeeker Payment scheme came into effect. This scheme replaces the Newstart Allowance scheme that was the default benefit scheme before March 20 this year.
"COVID-19 has not changed the law relating to redundancy but it may change legal outcomes. A job is redundant when an employer no longer requires it to be done by anyone. Even in the COVID-19 climate, before making an employee redundant, employers must consider whether an employee can be redeployed elsewhere in the business or in an associated business," said Akers.
Employers may also need to consult with employees about the redundancy.
Can you apply for a JobSeeker payment if you were stood down, and can you get a job in the interim while employed by your employer who stood you down?
"Yes, you could apply for JobSeeker and Centrelink would assess your application as it would any application for JobSeeker (formerly Newstart).
"Given that the employment relationship still continues, employees would need the permission of their employer to get another job while they have been stood down," says Akers.
8. Get free legal advice
Due to COVID-19, Legal Aid is offering free legal help if you are facing legal issues that relate to the COVID-19 public health laws. This includes employment problems, social security entitlements, family law issues or parenting problems. Legal Aid is available nationally. Contact your local Legal Aid office for more information.
9. Can your employer hire you again?
Akers says that due to the JobKeeper subsidy program, many small businesses have re-hired staff that they've made redundant shortly after the government-imposed restrictions on social gatherings and non-essential travel. If your employer hires you again after they've made you redundant, your employment starts again from scratch (this includes annual leave entitlements, period of employment, etc.).
Know your rights:
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