Redundancy in Australia: Understanding Your Rights and What You Can Claim
Redundancy is one of the most significant changes an employee can experience, and often one of the least understood. Some people assume that once an employer labels a termination as “redundancy,” the decision is final. Others believe that any redundancy can be challenged. In reality, the law draws a clear line between genuine operational change and a dismissal that has simply been packaged as redundancy.
At Leonard Lawyers, we act for employees across Australia who are navigating restructures, job losses, and disputes about entitlements. This guide explains how redundancy works under the Fair Work Act, what payments you may be owed, and how to recognise when something is not quite right.
What Does “Redundancy” Actually Mean?
Redundancy is a legal test. Under section 389 of the Fair Work Act 2009 (Cth), a dismissal is a genuine redundancy only if:
The job itself is no longer required, because of changes to the business.
The employer has complied with any consultation obligations in a modern award or enterprise agreement.
Redeployment was genuinely considered, and no reasonable alternative role was available.
All three elements must be satisfied. If even one is missing, the dismissal may not be a genuine redundancy.
When Is a Job Truly “Gone”?
A redundancy must relate to the role, not the person performing it.
A job may genuinely disappear because:
the business restructures
technology replaces certain tasks
functions are merged
operations shrink or relocate
But if the same work continues, whether performed by a new employee, a contractor, or redistributed among the team, the redundancy may not be genuine.
Employees often tell us:
“My job was advertised again.”
“Someone else is now doing my duties.”
“The restructure only affected me.”
These are red flags. They may indicate that the redundancy was used to remove a particular individual rather than eliminate the role.
Consultation: A Step Employers Commonly Overlook
Most awards and enterprise agreements require employers to:
notify affected employees of proposed changes
provide relevant information
invite feedback
genuinely consider responses before finalising decisions
Consultation is not a box‑ticking exercise. It must occur before the decision is made, not after. A failure to consult does not automatically make a redundancy unfair, but it is a significant factor the Fair Work Commission considers when assessing whether the dismissal was harsh, unjust or unreasonable.
Redeployment: More Than a Token Search
Before ending employment, an employer must explore whether the employee could reasonably be placed elsewhere in the business or an associated entity.
What is “reasonable” depends on:
the size and structure of the organisation
the availability of other roles
the employee’s skills and experience
whether retraining is practical
whether vacancies exist now or are expected to arise
An employer does not need to create a new job or displace another employee. But if a suitable vacancy exists and is not offered, the redundancy may fail the statutory test.
What Payments Are You Entitled to Receive?
Employees made redundant may be entitled to:
Redundancy Pay (Severance)
Under the National Employment Standards (NES), redundancy pay is based on continuous service:
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
These are minimums. Your award, enterprise agreement or contract may provide more generous entitlements.
Notice or Payment in Lieu
Separate from redundancy pay, employees are entitled to notice based on length of service (and age, for some employees). Employers often pay this out instead of requiring the employee to work through the notice period.
Accrued Leave
Annual leave and long service leave (where applicable) must be paid out on termination.
Who Is Not Eligible for NES Redundancy Pay?
NES redundancy pay does not apply to:
employees of small businesses (fewer than 15 employees)
casual employees
employees with less than 12 months’ service
employees whose role is genuinely temporary or fixed‑term
Employers can also apply to the Fair Work Commission to reduce redundancy pay in limited circumstances, such as where acceptable alternative employment has been secured.
If the Redundancy Doesn’t Seem Genuine: Your Options
If something feels off, several legal pathways may be available.
Unfair Dismissal
If the redundancy is not genuine, you may be able to lodge an unfair dismissal application. Strict deadline: 21 days from the date the dismissal takes effect.
General Protections (Adverse Action)
If the redundancy was connected to a prohibited reason, such as making a complaint, taking leave, requesting flexibility, or exercising a workplace right, a general protections claim may be available. Compensation is not capped at six months’ pay.
Underpayment Claims
If you were not paid the correct redundancy pay, notice, or leave entitlements, you can pursue recovery regardless of whether the redundancy itself was genuine.
Questions to Ask Yourself
If you are unsure whether your redundancy was lawful, consider:
Has your role truly disappeared?
Did the employer consult with you before making the decision?
Were other roles available that you could have performed?
Did the redundancy occur shortly after you raised a concern or exercised a workplace right?
Have you been paid all entitlements owed under the NES, your award, or your contract?
If any of these raise doubts, it is worth seeking advice promptly.
We Support Employees
Redundancy can be stressful, unexpected, and financially significant. At Leonard Lawyers, we act exclusively for employees and understand how employers approach restructures behind the scenes. We can help you assess whether your redundancy was lawful, what you are entitled to, and what steps you can take next.
