Redundancy Laws in New South Wales

Redundancy situations can transpire when a specific job role becomes superfluous or when a reduction in employee numbers becomes necessary. This can be instigated by new technological advancements, a downturn in business activity, company restructuring or reorganisation, financial distress or business relocation.

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Understanding Redundancy Pay Responsibilities

As an employer, your responsibility to offer redundancy pay in New South Wales depends on several factors, including but not limited to the length of the employee’s service, the size of your business and your company’s financial standing.

Redundancy pay should be calculated at the employee’s ordinary rate of pay, excluding overtime, allowances, commissions or bonuses, and it should be paid on the employee’s final workday or the next regular payday.

Genuineness of Redundancies and Potential Unfair Dismissal Claims

It is essential to ensure that all redundancies are genuine to avoid potential unfair dismissal claims. At Restructure by HCO, we recommend seeking our expert legal advice to avoid complications, as there are strict time frames for filing unfair dismissal claims.

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Navigating the Redundancy Pay Scale

The redundancy pay scale depends on the employee’s years of service. It starts from 4 weeks’ pay for over a year’s service to a maximum of 16 weeks’ pay for service over 9 years. As an employer, you are not obligated to provide redundancy pay for employees with less than 12 months of service.

Business Size, Financial Capacity and Redundancy Pay

Redundancy regulations take into account the size of your business. If your business has fewer than 15 employees, redundancy pay may not be required unless otherwise stated in the employment agreement.

In cases of financial distress preventing redundancy payments, you can apply to the Fair Work Commission for an exemption or reduction.

Impact of Job Offer Alternatives on Redundancy Pay

Redundancy pay responsibilities may be affected if an alternative role is offered to the employee. It is advisable to consult with our legal team before proposing an alternate role to an employee facing redundancy.

Trust Restructure for Your Redundancy Needs

At Restructure, we leverage the expertise of Hart & Co Lawyers to provide an innovative solution to employers navigating the redundancy process.

We offer instant, tailored guidance on managing redundancies and performance, as well as legal document templates and comprehensive checklists. For efficient and legally compliant redundancy management, trust Restructure. Call (03) 9110 3827 or choose a plan today.