Know your rights when it comes to redundancy

I have heard on the office grapevine that I am about to be made redundant. What can I do?

Redundancy and dismissal are two of the stressful, difficult and confusing situations employees face. The main aim is not to lose the plot during the trauma and stress involved. Focus on working methodically through the process to ensure you get the best deal.

If you are working in a company that has more than 15 employees, first establish that you are the subject of a genuine redundancy. That is where the employer has decided they no longer want any employee to do the job currently performed by you. If you are being retrenched for other reasons you regard as being unfair, your option is to proceed with an unfair dismissal claim.

Redundancy may be due to corporate restructuring, the introduction of new technology or outsourcing. It could also be a result of the employer's financial need to cut the workforce, or the appointment of a receiver because it can't pay its bills.

What else do I need to establish?

You need to determine the source of your redundancy entitlements. These may be found in the minimum National Employment Standards set out in the Fair Work Australia Act which apply to most Australians.

Generally redundancy payouts are linked to years of service.

Your entitlements may also be set out in an Enterprise Agreement (EA) which may include more generous conditions than those under the NES. Or you may be working under an award or a contract which sets out those entitlements.

What is my next step?

Once you have established the instrument that governs your employment conditions, check the redundancy entitlement it contains.

Under NES you would be entitled to no redundancy pay if you worked for less than a year, four weeks' pay if you worked between a year and two years, rising to six weeks for less than three years and in further steps to a maximum of 16 weeks' pay for nine years' service and less than 10 years. For over 10 years' service the minimum is 12 weeks' pay plus long service leave entitlements, which could add a further 12 weeks' pay.

Details of entitlements for years of service are set out in section 119 of the Fair Work Act at fairwork.gov.au

Check out your entitlements under an EA, contract or award. Your entitlements also include outstanding holiday pay and pay in lieu of notice. You may also be entitled to a recruitment consultant.

Get involved in the redundancy consultation process with your employer and talk to your union if you are working under an award.

What else must the employer do?

You must be consulted about the redundancy program, the reasons for it, and whether there is a comparable job in the organisation you would be prepared to take. If another job offered is not comparable in terms of pay and duties, you are entitled to a redundancy package. Or you have the option of mounting an unfair dismissal case.

When am I not entitled to receive redundancy pay?

If your employer has fewer then 15 employees you are not entitled to redundancy under the Fair Work Act. Also excluded are casual employees, those working on fixed-term contracts, apprentices and people working in high turnover and seasonal jobs such as fruit picking. That is unless your contract or award provides for redundancy.

What can I do if I am unhappy with the process, don't get my entitlement or am being discriminated against?

If you feel you are the subject of a non-genuine redundancy, seek a lawyer's advice on your entitlement options and whether you are facing an unfair dismissal situation. A legal letter to the employer might just do the trick. The section setting out whether your redundancy is genuine or not can be found under section 389 of the Fair Work Act. However, unfair dismissal cases can be quite difficult to mount and the grounds are narrow.

If your award has been breached by the redundancy conditions you can also commence an action in the Federal Magistrates' Court. Again, this involves court and legal costs.

Your cheapest option is to take a complaint about redundancy to the Fair Work Ombudsman on the website fairwork.gov.au and follow the prompts, or call on 131394.

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