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Redundancy: what is it?

There are provisions under legislation that stipulate that an employer will be required to pay a redundancy to an employee in certain circumstances. Broadly speaking, these circumstances can fall into two general categories: the employee’s employment is terminated because the work the employee does is not longer needed to be performed by that employee or any other; due to the insolvency or bankruptcy of the employer.

There are limits to when a terminated employee will not be entitled to redundancy. These can be defined by the duration of the employee’s employment and his or her conduct, the type of employment contract that was entered into, the size of the employer’s business, any intervening provisions of a modern award, any industry specific provisions or the existence of any redundancy scheme, or other situations such as where the employment is transferred to another employer or where the employee refuses employment on substantially similar terms and conditions, at a second employer.

Apart from the provisions of the legislation, there are many judicial decisions which are used to define and determine the meaning and application of the principles involved in assessing the likelihood and extent of a redundancy payment being made to an employee. Case law on this subject is constantly growing and a competent employment lawyer will have to consider the updated law when dealing with any matters where redundancy claims are involved. Some of those issues may include the meaning of redundancy in specific industries, the “ordinary and customary turnover of labour”, issues revolving around any separation package that is or may be offered to an employee facing redundancy and any possible claims in quantum meriut or damages that may also arise out of the facts of a given case. 

Taking all this into consideration, a calculation will then have to be made in respect of the quantum of the redundancy payment. This will be determined in accordance with the length of time that the employee has been working for the employer. If you need redundancy legal advice, contact our Sydney Employment Lawyers on (02) 9233 4048 or send an email to info@navado.com.au.

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