Employment law - Facing redundancy - What to Do?

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Jack A

9 April 2014
I work full time for a medium sized business and I've been there for just over 3 years in the Melbourne CBD. The writing on the wall is that there will likely be a round of redundancies in the next month or so. I'm not sure what it will mean for me. Can any employment lawyers tell me what I should do if I'm made redundant? Obviously, I'd prefer to avoid a redundancy, but its outside my control.

Andrew D

9 April 2014
A redundancy may occur for various reasons including business closure, introduction of new technology, an internal re-structure, outsourcing, or business sale or merger. It would be wise to get legal advice for your specific circumstances given that you’re facing redundancy. Knowing the business as you do, is there an opportunity for you to be re-deployed or is redundancy the only likely option?

Redundancy Pay:
If you’re a full time employee, been there 3+ years and its not a small business, you will be entitled to redundancy pay. This is provided in the National Employment Standards (NES) under the Fair Work Act 2009. Thoroughly check your employment documents – employees will likely also have an entitlement to redundancy pay arising out of the terms of:
- an award,
- an enterprise agreement,
- a workplace agreement,
- a contract of employment, or
- a company policy.

The purpose of redundancy pay is to compensate you for things such as lost leave as well as for the inconvenience and hardship imposed (eg, loss of seniority, loss of security of employment).

The NES provides that the minimum amount of redundancy pay to be paid is 7 weeks for someone who has had 3 years (but less than 4 years) of continuous service. Your contract, company policy, award or industrial agreement may set out a greater amount of redundancy pay.

Redundancy Notice:
The NES provides that the minimum amount of notice to be given to you if you have been made redundant is 3 weeks if your length of service is 3 - 5 years. Your contract, company policy, award or industrial agreement may give a longer period of notice. Your employer may elect to pay you instead of asking you to work the period of notice.

If you are made redundant, check the redundancy documents to ensure that you’re paid the correct amount and that your non-salary entitlements (such as leave) are correctly paid out.

Know your position and try to negotiate:
If possible you can try to negotiate the terms of your redundancy. Arm yourself with as much information and advice as you can so that you can determine what compensation and other entitlements you should receive. Make sure that your employer also offers time off for counselling, training and job search services.

If you need help:
Job Watch can give you free, confidential telephone information and referrals about employment rights. You should do this prior to signing your redundancy documentation. Your local community legal centre can also give you free legal information and advice. You may also wish to seek advice or speak to your union if you have one, the ATO or your tax advisor for how your payment might be taxed and your superannuation fund. If you think there will be any issues, there are a number of good employment lawyers in Melbourne who you can speak with.
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