View Contents+
In Australia, genuine redundancy entitles most employees to redundancy pay calculated on years of continuous service under the National Employment Standards. If consultation obligations were not met or the role was not truly abolished, the dismissal may not qualify as a genuine redundancy, giving rise to potential Fair Work Commission claims.
- 1.NES redundancy pay scales from 4 weeks (1–2 years of service) up to 16 weeks (9 or more years).
- 2.Employers must comply with any applicable modern award or enterprise agreement consultation obligations for a redundancy to be genuine.
- 3.Unfair dismissal or general protections applications must be lodged within 21 days of the dismissal taking effect.
§1Redundancy Pay Entitlements in Australia: Know Your Rights
§2The Situation: When a "Redundancy" Does Not Feel Right
Anika has worked as a marketing coordinator for a mid-sized retail company in Melbourne for seven years. Her employer calls her into a meeting on a Tuesday afternoon, hands her a letter saying her role has been "made redundant" effective the following Friday, and tells her she will receive two weeks' pay in lieu of notice. No prior warning was given, no consultation occurred, and Anika later discovers that a contractor has been hired to perform almost identical duties. She suspects something is wrong but does not know whether she was genuinely made redundant, what she is owed, or whether she has any avenue for recourse.
§3What "Genuine Redundancy" Actually Means — and Why It Matters
The word "redundancy" is often used loosely by employers, but Australian employment law draws a firm line. Under the Fair Work Act 2009 (Cth), a dismissal qualifies as a genuine redundancy only if all three of the following conditions are met:
- 1.The job no longer exists. The employer no longer requires anyone to perform the particular role. It is not enough that the business is restructuring or that the employee is being replaced by a cheaper worker.
- 2.Consultation obligations were followed. If the employee is covered by a modern award or enterprise agreement that contains consultation obligations — and most do — the employer must genuinely consult with affected employees before the decision is implemented. This means providing information about the change, discussing the impact, and genuinely considering the employee's ideas.
- 3.Redeployment was considered and was not reasonable. The employer must have considered whether it was reasonable to redeploy the employee to another suitable role within the business or an associated entity. If a suitable vacancy exists and the employer simply did not offer it, the redundancy may not be genuine.
Where any one of these three conditions is not satisfied, the dismissal may not be a genuine redundancy — and the employee may be entitled to pursue an unfair dismissal claim before the Fair Work Commission (FWC), provided they meet the minimum employment period (generally six months, or 12 months for small businesses).
§4How Redundancy Pay Is Calculated Under the National Employment Standards
The National Employment Standards (NES), which form part of the Fair Work Act 2009 (Cth), set out the minimum redundancy pay entitlements for most national system employees. The amount you receive depends on your years of continuous service with the employer:
| Years of Continuous Service | Redundancy Pay (Weeks of Base Pay) |
|---|---|
| At least 1 year but less than 2 years | 4 weeks |
| At least 2 years but less than 3 years | 6 weeks |
| At least 3 years but less than 4 years | 7 weeks |
| At least 4 years but less than 5 years | 8 weeks |
| At least 5 years but less than 6 years | 10 weeks |
| At least 6 years but less than 7 years | 11 weeks |
| At least 7 years but less than 8 years | 13 weeks |
| At least 8 years but less than 9 years | 14 weeks |
| At least 9 years but less than 10 years | 16 weeks |
| 10 years or more | 12 weeks* |
\The slight reduction at 10+ years reflects the long service leave entitlement that typically accrues over that period.*
Redundancy pay is separate from your notice entitlement (or pay in lieu of notice), annual leave payout, and long service leave. You are generally entitled to all of these on top of your redundancy pay. Redundancy pay is calculated on your base rate of pay — it does not include overtime, penalties, allowances, or bonuses unless your contract or enterprise agreement specifically provides otherwise.
Who Is Excluded from NES Redundancy Pay?
Not every employee is covered. The NES redundancy pay provisions do not apply to:
- Employees of small businesses (fewer than 15 employees at the time of dismissal).
- Casual employees.
- Employees whose employment is for a specified period or task (e.g., fixed-term contractors where the contract expires naturally).
- Apprentices.
- Employees to whom an applicable modern award or enterprise agreement provides an exclusion.
Even if you fall into one of these categories, your modern award, enterprise agreement, or employment contract may still provide an independent redundancy entitlement. Always check the specific instrument that covers your employment.
§5The Step-by-Step Process If You Believe Your Redundancy Was Unlawful
Step 1 — Gather your documents immediately
Collect your employment contract, any modern award or enterprise agreement that applies to your role, payslips, correspondence about the redundancy (including any letters or emails), and any records of consultation meetings (or evidence that none occurred).
Step 2 — Calculate what you are owed
Using the NES table above, work out your redundancy pay entitlement, then add your notice entitlement, any accrued but unpaid annual leave, and any long service leave you may have accrued (long service leave thresholds vary by state and territory — confirm with your relevant state authority).
Step 3 — Write to your employer
Before lodging a formal claim, write a letter or email to your employer setting out what you believe you are owed and requesting payment within a reasonable timeframe (commonly 14 days). Keep a copy of everything.
Step 4 — Lodge a Fair Work Commission application if required
If you believe the redundancy was not genuine, you have 21 days from the date the dismissal takes effect to lodge an unfair dismissal application (Form F2) with the Fair Work Commission. This deadline is strict; extensions are only granted in exceptional circumstances.
If you believe you were dismissed because of a workplace right or for a prohibited reason (e.g., because you made a complaint about your workplace), a general protections application (Form F8) must also be lodged within 21 days.
Cost: Lodging with the Fair Work Commission involves a filing fee (confirm the current fee with the FWC, as it is indexed periodically). Conciliation is free; arbitration may involve additional steps.
Duration: Most FWC unfair dismissal matters proceed to conciliation within four to eight weeks of lodgement. If the matter is not resolved at conciliation, it may proceed to arbitration, which can take several months.
Step 5 — Contact the Fair Work Ombudsman for unpaid entitlements
If your employer has simply not paid the correct redundancy amount (without a dispute about whether the redundancy was genuine), the Fair Work Ombudsman (FWO) can investigate and assist with recovery. You can lodge a complaint online at fairwork.gov.au. The FWO service is free.
§6Common Mistakes and Misconceptions About Redundancy
"My employer can make me redundant during probation and pay nothing." Generally correct for probationary employees who have not yet met the minimum employment period — they cannot bring an unfair dismissal claim. However, they may still be entitled to notice pay and, in some circumstances, redundancy pay if covered by an enterprise agreement.
"Redundancy pay is taxed the same as wages." Incorrect. Genuine redundancy payments receive concessional tax treatment up to a tax-free threshold that is indexed each year. Amounts above that threshold are taxed as an employment termination payment (ETP), which also carries concessional rates. Check with the Australian Taxation Office or a tax adviser for the current thresholds.
"If the company is restructuring, the redundancy is automatically genuine." Not necessarily. The restructure must result in the actual role no longer being required. If the same tasks are redistributed to existing staff or a new hire performs the same work, the job arguably still exists.
"I can negotiate extra redundancy pay whenever I like." You can negotiate, but your employer is only legally obliged to pay the NES minimum (or more if your contract or agreement provides). Some employers do offer enhanced packages — always get any enhanced offer in writing before signing a deed of release.
"Signing a deed of release means I lose all my rights." A deed of release typically extinguishes the claims specified in it in exchange for a payment. Before signing, have a solicitor review the document, because some deeds are drafted very broadly and may extinguish claims you did not intend to waive.
§7Relevant Law
The primary legislative framework for redundancy entitlements in Australia is the Fair Work Act 2009 (Cth), which establishes the National Employment Standards, sets out the definition of genuine redundancy, and confers jurisdiction on the Fair Work Commission to deal with unfair dismissal and general protections claims. The Fair Work Regulations 2009 (Cth) supplement the Act with procedural detail. Because the provided sources do not include specific sections or cases on redundancy, no section numbers or case citations are reproduced here; always confirm current section references with the Fair Work Commission or a solicitor.
State and territory legislation — such as long service leave Acts — continues to operate alongside the federal framework. Employees not in the national system (a small minority, mainly in Western Australia's state system) may have different entitlements under relevant state industrial legislation.
§8Real Cases Illustrating the Issues
Because the provided source materials do not include redundancy-specific decisions, no case citations are reproduced in this guide. The Fair Work Commission publishes a searchable database of unfair dismissal and general protections decisions at fwc.gov.au, where you can find real examples of how the Commission has analysed whether a redundancy was genuine, whether consultation obligations were met, and whether redeployment was reasonable. Reviewing these decisions can give you a clearer sense of how the Commission approaches similar fact patterns to your own situation.
§9Your Pre-Action Checklist
- [ ] Confirm whether you are a national system employee covered by the Fair Work Act 2009 (Cth).
- [ ] Check whether you have reached the minimum employment period (6 months / 12 months for small business).
- [ ] Identify whether a modern award or enterprise agreement covers your employment and review its consultation clause.
- [ ] Calculate your NES redundancy pay entitlement using years of continuous service.
- [ ] Obtain written confirmation from your employer of the amounts they intend to pay and the reason for redundancy.
- [ ] Check whether any vacant roles existed in the business or associated entities that you could reasonably have been offered.
- [ ] Note the date your dismissal takes effect — the 21-day FWC application clock starts from this date.
- [ ] If you received a deed of release, have a solicitor review it before signing.
- [ ] Check your tax position with an accountant regarding the concessional treatment of genuine redundancy payments.
- [ ] Contact the Fair Work Ombudsman (fairwork.gov.au) or the Fair Work Commission (fwc.gov.au) for free general information.
§10Get a Head Start with ROY's Free AI Matter Analysis
ROY's free AI matter analysis tool can help you quickly map out the key issues in your redundancy situation before you engage a solicitor — visit the ROY platform to get started.
Disclaimer: This article provides general legal information about redundancy entitlements in Australia. It is not legal advice, does not create a solicitor–client relationship, and should not be relied upon as a substitute for advice tailored to your specific circumstances. Laws vary by state and territory and change over time. If you are unsure about your rights, consult a qualified Australian employment solicitor or contact the Fair Work Ombudsman.
Frequently Asked Questions
Q. Can my employer make me redundant and then hire someone else for the same role?+
Generally, no. If a new employee or contractor is engaged to perform substantially the same duties shortly after your dismissal, this is a strong indicator that the redundancy was not genuine. A genuine redundancy requires that the job itself no longer exists within the business. You may have grounds to lodge an unfair dismissal application with the Fair Work Commission if this occurs.
Q. Am I entitled to redundancy pay if I work for a small business?+
Most employees of small businesses — defined as employers with fewer than 15 employees at the time of dismissal — are excluded from the National Employment Standards redundancy pay provisions. However, your modern award or enterprise agreement may still entitle you to a redundancy payment, so it is important to check your specific instrument before assuming you have no entitlement.
Q. How is redundancy pay different from pay in lieu of notice?+
Redundancy pay and notice (or pay in lieu of notice) are two separate entitlements. Redundancy pay is a lump sum based on your years of continuous service, calculated under the NES scale. Pay in lieu of notice is payment for the notice period your employer would otherwise be required to give you before your employment ends. You are generally entitled to both, not just one.
Q. What happens to my redundancy entitlement if my employer is insolvent?+
If your employer becomes insolvent or bankrupt and cannot pay your redundancy entitlement, you may be able to access the Fair Entitlements Guarantee (FEG), a federal government scheme that covers certain unpaid entitlements including redundancy pay, up to prescribed caps. You should contact the Department of Employment and Workplace Relations to check eligibility, as conditions apply.
Q. Does redundancy pay affect my Centrelink income support payments?+
Yes, redundancy pay can affect your eligibility for income support payments such as JobSeeker. Services Australia applies an "income maintenance period" during which payments may be reduced or withheld because you received a redundancy or leave payout. The length of this period depends on the amount received. It is advisable to contact Services Australia promptly after your redundancy to understand how your entitlements interact.
Let ROY organise your case
before you go it alone
Enter your situation and AI will map out the key issues, outcome distribution from similar cases, and connect you to specialist firms — all in one step.
Related Legal Guides
Partner Visa Applications in Australia: Eligibility, Evidence and Timeline
Spousal and De Facto Visa Applications in Australia: A Complete Guide
What to Do After a Workplace Injury: Reporting and Claims Steps
Making a Tribunal Claim in Australia: A Step-by-Step Guide
This document is provided for general informational purposes only and does not constitute legal advice, legal counsel, or a guarantee of outcome for any specific case. For specific legal matters, please consult a qualified Australian legal practitioner. ROY Legal Insights is an information service and not a law firm. First published: 2026.10.29.