Redundancy Australia law — the essentials
Redundancy happens when your job is no longer required due to operational changes such as restructure, automation, relocation or closure. Under the Fair Work Act 2009 (Cth) and the National Employment Standards (NES), most full‑time and part‑time employees are entitled to:
- consultation under an award or enterprise agreement (if one applies)
- reasonable redeployment consideration before termination
- notice of termination (or pay in lieu)
- redundancy pay based on length of service (unless an exemption applies)
- payment of outstanding entitlements (e.g. annual leave, long service leave according to state/territory rules)
Important: This page provides general information only. Entitlements can vary by award, enterprise agreement, contract, service history, business size and insolvency status. Get tailored advice before you accept or challenge any offer.
Redundancy entitlements and eligibility
Who gets redundancy pay?
- Employees (other than casuals) covered by the NES
- Employees whose employer has 15+ employees (small business exemption noted below)
- Employees not excluded by their award/enterprise agreement or specific industry rules
Redundancy pay is separate from notice, unused annual leave and any long service leave (state/territory legislation).
NES redundancy pay scale
| Continuous service | NES redundancy pay |
|---|---|
| Less than 1 year | 0 weeks |
| 1 – 2 years | 4 weeks |
| 2 – 3 years | 6 weeks |
| 3 – 4 years | 7 weeks |
| 4 – 5 years | 8 weeks |
| 5 – 6 years | 10 weeks |
| 6 – 7 years | 11 weeks |
| 7 – 8 years | 13 weeks |
| 8 – 9 years | 14 weeks |
| 9 – 10 years | 16 weeks |
| 10+ years | 12 weeks |
Higher amounts may apply under a contract, award or enterprise agreement. Some service (e.g., certain unpaid leave) may not count towards continuous service.
When is a redundancy genuine?
Under redundancy Australia law, a dismissal is a genuine redundancy if all three of the following apply:
- Role no longer required: Because of operational changes, your job is not required to be done by anyone.
- Consultation occurred: Your employer complied with consultation obligations under any applicable award or enterprise agreement.
- No reasonable redeployment: It was not reasonable to redeploy you within the enterprise or an associated entity.
If any limb fails, you may have unfair dismissal or general protections options. Time limits are short.
Typical process and timelines
| Stage | What usually happens |
|---|---|
| Consultation | Employer shares reasons, proposed changes and invites feedback. You can ask questions and suggest alternatives. |
| Redeployment | Employer considers suitable roles across the enterprise/associated entities. You can express interest and highlight your skills. |
| Notice | Written notice of termination or pay in lieu, based on service and instrument. Garden leave may apply. |
| Final pay | Redundancy pay (if eligible), notice in lieu (if any), accrued leave and other entitlements are paid per contract/award timelines (often on or soon after final day or next pay cycle). |
| References & IP | Return property, confirm confidentiality/IP obligations, discuss references and outplacement (if offered). |
Documents and information to collect
- employment contract and any variations
- applicable award or enterprise agreement
- consultation emails/meeting notes and timeframe
- redundancy/termination letter and notice details
- organisation chart and restructure proposal
- list of vacancies and any redeployment offers
- recent payslips and leave balances
- calculations provided by employer (payout breakdown)
Small business and other exemptions
Small business employers
Employers with fewer than 15 employees are generally exempt from paying NES redundancy pay. However:
- notice of termination still applies
- consultation may apply under an award/agreement
- dismissal must still be a genuine redundancy to avoid unfair dismissal claims
Other situations
- Casuals are not entitled to redundancy pay under the NES
- Fixed‑term employees may not be entitled when the term simply ends
- Insolvency: consider the Fair Entitlements Guarantee (FEG) for certain unpaid entitlements
- Contracts or enterprise agreements can provide more than NES
Taxes, super and other financial points
- Tax-free component: Genuine redundancy payments may include a tax-free amount up to an ATO‑indexed cap (varies each year). Amounts above the cap are usually taxed as an employment termination payment (ETP).
- Superannuation: Super is generally not payable on redundancy pay or unused leave. Check if any instrument requires super on specific components.
- Leave: Unused annual leave and long service leave are taxed differently to redundancy pay. State/territory rules affect long service leave.
- Centrelink & new role: Timing of payments can affect benefits. Get tax/financial advice before changing payment structures.
Disputes, unfair dismissal and time limits
Options if you disagree
- Unfair dismissal (FWC): If not a genuine redundancy, apply within 21 days of termination.
- General protections: If adverse action linked to a workplace right, discrimination, or exercising a right, apply within 21 days (dismissal cases).
- Underpayments: Seek help from the Fair Work Ombudsman or small claims if payout is short.
- Award/agreement disputes: Some issues go through FWC dispute procedures.
Settlement and negotiation
Many matters resolve by:
- correcting calculations or service dates
- adding outplacement or references
- negotiating a deed of release with agreed wording
- seeking compensation where redeployment/consultation failed
Costs and how we help
We help employees and employers understand redundancy Australia law and choose the right path. Typical options:
- Free call-back: Triage your situation and timelines
- Fixed-fee review: Contract/award check and payout estimate before you sign
- Negotiation support: Draft emails, settlement terms and deed of release review
- Representation: Unfair dismissal or general protections applications (time limits apply)
Employment lawyers commonly charge $300–$600+ per hour. We can connect you with fixed‑fee or staged‑fee options near you.
Redundancy FAQ
What is a genuine redundancy under Australian law?
A redundancy is genuine when your role is no longer required, consultation obligations were met and there was no reasonable redeployment within the enterprise or associated entities.
How much redundancy pay am I entitled to?
Under the NES, redundancy pay depends on your continuous service. It ranges from 4 weeks at 1–2 years up to 16 weeks at 9–10 years and 12 weeks at 10+ years. Awards, agreements or contracts may provide more.
Do small businesses have to pay redundancy?
Small business employers (fewer than 15 employees) are generally exempt from NES redundancy pay. Notice and any consultation obligations can still apply, and the dismissal must still be genuine.
What is the deadline to challenge a redundancy?
Typically 21 days from the date employment ended to lodge an unfair dismissal or general protections dismissal application with the Fair Work Commission.
Is redundancy pay taxable and is super payable?
Genuine redundancy can include a tax‑free component up to an ATO‑indexed cap. Amounts above are usually taxed as an ETP. Super is generally not payable on redundancy pay or unused leave.
Need help with redundancy or payout questions?
Get a free, confidential call-back. We’ll check eligibility, time limits and your payout estimate, and connect you with fixed‑fee options if needed.