But do I HAVE to (make redundancy payments)?

Sing it with me, Bob Dylan: the times they are a changin’.

For one reason or another, your business is undergoing significant operational changes and you need to make some of your workforce redundant.

So, who do you make redundant, how do you do it properly and, most importantly, what do you have to pay them?

1. Who you make redundant will depend on the reasons for the redundancy, as well as the size of your business and the nature of the restructure.
2. The proper process and procedure to be followed will depend on the terms of the employment contract and/or applicable modern award or enterprise bargaining agreement. 
3. Generally, you will not have to pay an employee redundancy pay in the following situations:

1. The employee was employed on a casual or fixed-term contract;
2. The employee has only been employed for less than 12 months; or
3. The employee was an independent contractor.

There are some exceptions to this rule and then some exceptions to those exceptions.

Also, those exceptions are not the only exceptions.

Put simply, redundancy can be incredibly complicated.

Get it right and get the experts to talk you through it.

Penalties of up to $54,000 for corporations and $10,800 apply to directors for breaching their redundancy obligations under the Fair Work Act 2009 (Cth) so it pays to pay up! (Though only when you have to, of course.)

Call the Workplace Relations team at Nevett Ford on (03) 9614 7111 and we’ll make it look easy. 

 

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You need to finish what you start

The Fair Work Commission is committed to “a fair go all round”. This does not mean, however, that it is there purely for the convenience of one party to an application.

This much is demonstrated in Newbey v Atlas Group Pty Ltd [2016] FWC 5246.

On 22 April 2016 Mr Newbey applied for an unfair dismissal remedy arising from the termination of his employment at Atlas.

When Atlas lodged its response saying that the termination was a genuine redundancy the commission listed the application for conferences and directions, neither of which Mr Newby attended or complied with over a two month period.

As a date for participation or compliance approached, Mr Newbey, who had obtained another job in the meantime, routinely emailed the commission that he was unavailable requesting another time.

Matters came to a head when he had not lodged documents by 27 September 2016 in compliance with directions earlier given. When the commission could not reach Mr Newbey and there was no explanation from him, it dismissed his application under section 399A of the Fair Work Act.

The lesson for dismissed workers is that they must be prepared to see their applications through.

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Redundant one day and offered alternate employment the next equals no redundancy pay

DRW Investments Pty Ltd v Richards [2016] FWC 461 is a decision in which a large transport company having lost a major hauling contract found work for affected drivers with the new contractor.


The affected drivers argued that they had been made redundant by their old employer entitling them to redundancy payments but the old employer disagreed.


Commissioner Sams found that the drivers had resigned from their old employer to take up work with the new employer. As a result their employment had not been terminated at the initiative of the old employer so as to bring into operation section 119 of the Fair Work Act.


Commissioner Sams also commented that redundancy pay was for a specific beneficial purpose and not meant as a windfall where employees, whilst being made redundant one day are offered and accept suitable alternative employment the next day.

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