Rights of employees upon redundancy of their position and in the case of any resulting termination of the employee’s employment will depend upon whether the employee falls into the Federal employment and industrial relations jurisdiction (National System Employees) or under the jurisdiction of the State in which the employee works.

National System Employees

National System Employees are employees covered by the Fair Work Act 2009 (Cth) (Act). The Act covers all Commonwealth public sector employees and private sector employees in all states (except in Western Australia, where the private sector coverage of the Act is limited to those employed by constitutional corporations but not, for example, partnerships). As such, national System Employees represent the majority of employees in Australia.

National System Employees have a right under the Act to severance pay upon termination due to redundancy ranging between 4 and 12 weeks’ pay based on length of service.

For the purpose of calculating redundancy pay under the Act, the service of National System Employees who did not have a right to redundancy pay prior to the commencement of the Act is taken to have commenced on 1 January 2010.

The right to redundancy pay under the Act is in addition to the employee’s right under the Act to receive notice of termination of employment, and/or pay in lieu of such notice.

National System Employees may also be covered by an industrial or vocational award (Modern Award). If a National System Employee is covered by a Modern Award, they will generally have a right to:

  • consultation about the proposed redundancy. This ‘right’ to consultation is characterised as an obligation of the employer to consult about ‘major workplace change’ and is ordinarily triggered in the case of redundancies. In the course of such consultation, employees have the opportunity to raise measures to mitigate the adverse effects of the proposed changes (eg. redeployment) and employers are obliged to give prompt consideration to matters raised;
  • terminate their employment during the notice period provided under the Act and, despite doing so, retain the right to the payments and benefits they would have received had they remained employed until the end of the notice period (including redundancy pay, but excluding the period of notice which they did not work); and
  • one paid day off per week during the notice period provided under the Act for the purpose of seeking alternative employment.

Non-National System Employees

Non National System Employees are state public sector employees and employees in Western Australia other than those employed by the Commonwealth or a constitutional corporation.

Non National System Employees generally have a statutory right to severance/redundancy pay under applicable state legislation at or above the level provided under the Act. Certain Non-National System Employees also have job seeking entitlements and consultation rights in connection with redundancy arising under the terms of state industrial awards.