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In the ideal world we would not have to deal with the unpleasant nature of redundancy which can be a flow on effect from disruptive technology for industries as a whole or from individual businesses who have pivoted their business operations to minimize the economic effects of COVID.
It is important however that if the time comes, both employers and employees know their rights in regards to redundancy as stipulated by the Fair Work Ombudsman.
Redundancy Vs termination due to under performance
Redundancy is when the JOB the employee performs is no longer necessary to business operations. Termination due to under performance is when the EMPLOYEE is no longer needed due to miss alignment with the companies needs, however the job they were performing is still relevant and must be filled by someone else.
Redundancy payment rates Australia
Redundancy payments are administered by the national workplace relations system which was created from the Fair Work Act 2009 (So is pretty much everything else payroll or employment related).
Redundancy payments can vary slightly for different industry awards such as the construction and building industry, but most other industries are covered by the following rates which show the amount of weeks of ordinary pay to be paid upon termination:
Do all employees who are made redundant need to be paid out?
The following employees are generally not entitled to redundancy payments:
- Employees of a small business (who employs less than 15 people)
- Casual Employees
- Employees who have worked at the business for less than 12 months
- Employees who were hired for a specific project/time period/season
- Apprentices
- Employees fired for serious misconduct
More information on redundancy payments can be found at this Fair Work web page.
For help with Australian payroll administration, employee termination payments or salary packaging contact CTK Accounting. CTK is based in Corrimal and services Wollongong and surrounding suburbs.
