Redundancy

An employer can make a role redundant if they:

• Can show that it’s genuinely no longer required by the business
• Have consulted the workforce in accordance with requirements in the relevant award or agreement
• Have offered any affected employees a suitable alternative role, where reasonable

Genuine reasons for redundancy can be because the business has moved to a new location, has restructured or has gone out of business.

Redundancy refers to a specific role — not the person who performs it. Your employer cannot make someone redundant and then hire someone else to continue doing the same job.

If your role becomes redundant you can either be redeployed or retrenched.

Consultation

Employers must consult employees about major changes in the workplace that will affect them. This includes any changes that could lead to redundancies.

The exact rules around consultation vary between different awards and agreements. But generally, employers must:

• Consult you if they plan to make changes
• Tell you how the changes will affect you
• Give you information about what is being done to minimise the negative impacts
• Give you the chance to have a say about decisions that will affect you before the changes are made

If your employer makes jobs redundant without consulting the workforce beforehand, those actions may be unfair or invalid. If this occurs you should get in touch with your union immediately to discuss the best course of action.

Redeployment

If your job is made redundant, your employer must offer you another suitable role if they can. This is known as redeployment. 

A suitable role is one that takes into account your skills and experience, current hours and pay, and is at a suitable location

If you refuse to be redeployed to a suitable new role, then you may not be eligible for redundancy pay.

Your union can give you advice about redeployment if you need it.

Retrenchment

If your job is made redundant and there is no suitable role for your employer to offer you, you will lose your job. This is known as retrenchment.

If you are being retrenched, you may be eligible for redundancy pay.

Redundancy pay

If your job has been made redundant and your employer cannot offer you another suitable role, then you may be eligible for redundancy pay.

Most permanent employees are eligible for redundancy pay. Those who usually do not qualify include:

• Casual employees
• Employees of a small business
• Anyone who has been employed for less than a year

The conclusion of a fixed-term contract or an apprenticeship is not considered a redundancy.

How much redundancy pay you get is calculated according to the number of years you have been working for your employer.

You are paid your base weekly rate of pay at the time that you are made redundant. It does not include extra amounts like allowances, penalty rates, loadings or bonuses.

(* Entitlements are reduced on the assumption that employees also have long service leave entitlements.) 

This table shows minimum amounts of redundancy pay, as defined by the National Employment Standards. Certain awards, agreements or employment contracts provide for more. Contact your union if you need help working out how much notice you are entitled to.

Please note, you will also be entitled to be given notice of termination, in addition to your redundancy pay.

If you need advice about redundancy pay, your union will be able to help.

Voluntary redundancy

When an employer needs to make roles redundant, they may instead invite staff to apply for a voluntary redundancy: a financial incentive for some staff to leave voluntarily, to avoid the need for compulsory retrenchments.

Redundancy and unfair dismissal

Your employer is not allowed to hire someone else to replace the person whose role is being made redundant. In other words, employers cannot use redundancy as an excuse to get rid of employees. Nor should your employer failure to consult the workforce about redundancies or fail to offer suitable redeployments to affected staff where possible.

If you have been made redundant in a way that you feel was unfair, you may be able to challenge this decision, including by filing for unfair dismissal. Ask your union for advice if this is the case.

Funding for this factsheet was provided by the Victorian Government as part of the uTech project. Please note that the information given here is general information only and is not legal advice. For further assistance, it is recommended you speak to your union.