How To Get Maximum Redundancy Entitlements

Don't leave money on the table.

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redundancy-entitlements
Irene McConnell
5 min read

July 13, 2021

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Is your job at the risk of redundancy? You’re not alone. The COVID pandemic has triggered ongoing company transformations which, in turn, have cascaded into an avalanche of staff redundancies.

Prior to the pandemic, one in four Australians could expect to be made redundant during the course of their working lives.

I predict that in the next decade, this number will rise to one in three.

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The rise in hybrid workplaces, remote work, automation and the gig economy is delivering new levels of freedom and flexibility (at least to some workplaces), but in doing so, it is making a large number of existing roles redundant.

Redundancy Is Stressful.

If you’re like most people, redundancy is not your ideal scenario.

Sure, the redundancy lump sum payment is fun, but by the time you give half of it to the ATO, you’re left with a surprisingly short financial runway from which to relaunch your career (landing a senior management or an executive role can take anywhere between 6 and 12 months).

Either way, news of your redundancy is likely to mark the beginning of a period of deep uncertainty about your future.

It can also trigger doubts about your skills and abilities – or questions around the value you bring to the table.

If you’re in this boat right now, remember – all of this is normal. That being said…

“Never Waste A Good Crisis.”

Take heed from Winston Churchill, who once famously uttered the line above to remind us that best opportunities are often found when you least expect them.

A redundancy can be a good opportunity for you to take stock of your career and professional brand.

In doing so, you can find doors that open paths to bigger and better things.

But before we talk about all of the benefits that a redundancy presents you with, let’s cover off the definitions.

What Is A Redundancy?

Legally, redundancy happens when an employee is dismissed because of factors outside their control.

These factors include:

  • Technology taking over a role.
  • Decline in the business’ financial performance.
  • Closure, relocation or restructure of business.

A redundancy can be forced or voluntary.

You are entitled to a redundancy payout (or severance pay) if you have been continuously employed for more than one year.

How much you receive depends on your length of continuous service.

Continuous service excludes any unauthorised absences, unpaid leave or unpaid authorised absence (such as parental leave).

However, you do not receive entitlements if you were:

  • Fired because of serious misconduct.
  • Employed for a project or specific period of time (a contract role).
  • Employed on a casual basis.
  • Employed as an apprentice or a trainee.
  • Employed at a company with less than 15 employees (at the time of the redundancy).

Generally, if you have served continuously for at least a year, but less than two years, you are entitled to four weeks pay.

If you have served for two years, but less than three years, you receive six weeks’ pay. For three years but less than four years of service, it rises to seven weeks’ pay, and so on. This table gives you full details:

Period of Continuous Service: Redundancy Pay Period:
—————————————————————————– ———————————–
   
More than 1 year, but less than 2 years 4 weeks
More than 2 years, but less than 3 years 6 weeks
More than 3 years, but less than 4 years 7 weeks
More than 4 years, but less than 5 years 8 weeks
More than 5 years, but less than 6 years 10 weeks
More than 6 years, but less than 7 years 11 weeks
More than 7 years, but less than 8 years 13 weeks
More than 8 years, but less than 9 years 14 weeks
More than 9 years, but less than 10 years 16 weeks
More than 10 years 12 weeks

 
The most you are entitled to is 12 weeks’ pay for at least 10 years’ service, because you now qualify for long service leave.

Also, if you are over 45 and have worked with the business for at least two years, you may be entitled to an additional week’s notice.

A good formula to follow is: Best Rate of Pay x Redundancy Pay Period = Redundancy Pay.

You should receive your payout when you finish work or on the next regular pay run.

For precise calculation of leave entitlements, follow this link to the Fairwork.gov.au calculator.

During your notice period, most modern awards will provide you with at least one paid day off a week to look for a new role. If you need more than a day, you can request to take annual leave.

What happens if you are transferred to a new role within the business?

If you are offered (and accept) a new role at similar pay, you don’t qualify for a redundancy payout. However, If the role is a lower paid position, you are entitled to a payout based on the difference in pay between your previous and new role.

Above all, you must be consulted about major workplace changes, particularly if you will be personally affected.

Companies are obliged to discuss next steps with you to minimise impact to you and consider your suggestions regarding organisational changes.

Is Your Redundancy Genuine?

A redundancy is not genuine and becomes unfair dismissal when:

  • You faced discrimination.
  • Your role is still required to be performed by a person.
  • You were not treated fairly during the dismissal process.
  • You took adverse action upon exercising a workplace right (for example, making a complaint).
  • You could have reasonably been given another job within the business or an associated entity.

If you feel your redundancy is not genuine and you want to appeal the decision, you have 21 days (starting from the day after you were dismissed) to lodge an application with the Fair Work Commission.

Additionally, if you feel you haven’t been paid everything you are entitled to, try to resolve the issue with your employer first, and if that isn’t successful, go to the Fair Work Commission.

Your Life After Redundancy.

Many employers will offer an outplacement service as part of your redundancy package.

However, the quality of these services often leaves a lot to be desired. Typically, these are ‘tick the box’ affairs that offer little meaningful, relevant support.

Additionally, these services often overvalue the need for developing your online job application skills. With most open positions filled through referrals and internal appointments, your time is best spent finessing your networking and interviewing skills.

Life after a redundancy can be challenging, particularly if you haven’t applied for a job in years. For many of us, our professional identities form a huge part of who we are and losing that can be devastating.

Make sure you look after emotional and mental health by joining support networks.

Be proactive in your job search and make sure your resume and LinkedIn profile are optimised for today’s job market. Ask yourself these questions:

“What’s my personal brand?”

“Does my value proposition come through clearly?”

“Do my professional documents align with my career direction?”

If you have trouble answering any of these questions, read my guide to branding yourself.

Above all, prioritise building relationships with recruiters and leverage your network to boost your chances of a referral. Don’t simply apply via job boards and wait for the phone to ring (instead, read my guide: How To Get A Job Fast).

Finally, keep in mind that my team is on hand to do the heavy lifting for you; we can help you create a personal brand that clearly articulates your value and showcases your unique point of difference.

I wish you all the best in your job search efforts.
 
– Irene
 

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