Redundancy & Restructure Lawyers Melbourne

Your notice period and redundancy pay depend on how long you've worked for the employer. The required notice period depends on your length of continuous service:

• 1 year or less: 1 week
• More than 1 year but less than 3 years: 2 weeks
• More than 3 years but less than 5 years: 3 weeks
• More than 5 years: 4 weeks

Employees over 45 years old with at least 2 years of continuous service receive an additional week's notice.

Here's how your redundancy pay is calculated under the Fair Work Act. Redundancy pay is based on your continuous service with the employer, calculated as follows:

• At least 1 year but less than 2 years: 4 weeks' pay
• At least 2 years but less than 3 years: 6 weeks' pay
• At least 3 years but less than 4 years: 7 weeks' pay
• At least 4 years but less than 5 years: 8 weeks' pay
• At least 5 years but less than 6 years: 10 weeks' pay
• At least 6 years but less than 7 years: 11 weeks' pay
• At least 7 years but less than 8 years: 13 weeks' pay
• At least 8 years but less than 9 years: 14 weeks' pay
• At least 9 years but less than 10 years: 16 weeks' pay
• At least 10 years: 12 weeks' pay

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An employer can apply to the Fair Work Commission to reduce the redundancy pay if:

• They have obtained other acceptable employment for the employee.
• They cannot afford the full redundancy amount.

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Employees have the right to:

• Be consulted about the redundancy process.
• Receive the appropriate notice period or payment in lieu.
• Receive redundancy pay if eligible.
• Be considered for redeployment within the organization or associated entities.

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Employers must:

• Ensure the redundancy is genuine.
• Consult with employees as required by awards or agreements.
• Provide the correct notice period or payment in lieu.
• Pay eligible employees their redundancy entitlements.
• Consider redeployment opportunities within the organization or associated entities.

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Not all employees are eligible for redundancy pay. Exclusions include:

• Employees with less than 12 months of continuous service.
• Casual employees.
• Employees on fixed-term contracts.
• Apprentices and trainees engaged only for the length of the training agreement.
• Employees dismissed for serious misconduct.
• Employees of small businesses with fewer than 15 employees.

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An employee may challenge a redundancy if they believe:

• It is not a genuine redundancy.

• Proper consultation did not occur.

• They were unfairly selected for redundancy.

Challenges can be made through unfair dismissal claims or general protections applications.

Genuine redundancy payments are tax-free up to a certain limit, which is calculated based on a base amount plus an additional amount for each completed year of service. For the 2024–25 financial year, the tax-free threshold comprises a base amount of $12,524 plus $6,264 for each year of service. Amounts exceeding this tax-free limit are treated as Employment Termination Payments (ETPs) and are taxed at concessional rates up to a capped amount. The specific tax rates and caps depend on factors such as the recipient's age and the total amount received. It's important to note that these thresholds are indexed annually, so they may change over time.

A redundancy is considered genuine if:

• The employer no longer requires the role to be performed by anyone due to operational changes.
• The employer has complied with any obligations to consult about the redundancy under an award or registered agreement.
• It was not reasonable to redeploy the employee within the employer's enterprise or an associated entity.

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Employers must consult with employees when considering redundancy, as stipulated in relevant awards or agreements. This process involves:

• Notifying employees of the proposed changes.
• Providing information about the changes and their expected effects.
• Discussing measures to avert or mitigate adverse effects on employees.

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