Being told your role is redundant can feel identical to being fired, but the two are treated very differently under Australian law — and that difference decides what you're owed. Here's what a genuine redundancy actually requires, how severance pay is calculated, and what to do if something about it doesn't add up.
- A redundancy is only "genuine" if your job itself is no longer needed by anyone, your employer met any consultation obligations, and redeploying you elsewhere in the business wasn't reasonable.
- If any of those three things aren't true, it may not be a genuine redundancy — and you could have grounds for an unfair dismissal claim instead.
- Redundancy pay is set by law based on your length of continuous service, from 4 weeks up to a maximum of 16 weeks.
- Small businesses with fewer than 15 employees are generally exempt from paying redundancy pay — but still have to give proper notice.
- Casual employees and anyone with under 12 months' service generally aren't entitled to redundancy pay under the National Employment Standards.
- Your accrued annual leave is always paid out in full — but unused sick leave generally isn't, and long service leave depends on your state.
What makes a redundancy "genuine"?
Under the Fair Work Act, a redundancy has to meet three conditions to be genuine. All three — not just one.
Your job is no longer required by anyone
The role itself has to disappear because of changes to how the business operates — restructuring, automation, downsizing, a location closing. If someone else is doing your job under a different title a month later, that's a red flag.
Your employer followed any consultation obligations
Most modern awards and enterprise agreements require employers to notify affected employees, discuss the change, and genuinely consider their input before the decision is locked in — not just announce it after the fact.
Redeployment wasn't reasonable
If a suitable alternative role existed elsewhere in the business (or a related entity) and your employer didn't offer it to you, the redundancy may not be genuine.
If your redundancy isn't genuine, it doesn't automatically mean you were treated unlawfully — but it does open the door to an unfair dismissal claim through the Fair Work Commission, which has a strict 21-day deadline from your dismissal date.
Employment tenure — what actually counts
"Length of service" directly drives two separate entitlements that run on different scales: your notice period and your redundancy pay. Both are based on continuous service — unbroken employment with the same employer (authorised leave like annual or parental leave still counts; most unpaid leave doesn't break it, but check the specifics if you've had a gap).
| Continuous service | Minimum notice period |
|---|---|
| Up to 1 year | 1 week |
| 1 to 3 years | 2 weeks |
| 3 to 5 years | 3 weeks |
| More than 5 years | 4 weeks |
Add 1 extra week to the table above if you're 45 or older and have completed at least 2 years of continuous service. This applies regardless of business size — it's separate from redundancy pay, and it's not something a small business can skip.
Severance — are you eligible, and how much?
Redundancy pay is set out in the National Employment Standards and scales with your length of service:
| Continuous service | Redundancy pay |
|---|---|
| 1–2 years | 4 weeks' pay |
| 2–3 years | 6 weeks |
| 3–4 years | 7 weeks |
| 4–5 years | 8 weeks |
| 5–6 years | 10 weeks |
| 6–7 years | 11 weeks |
| 7–8 years | 13 weeks |
| 8–9 years | 14 weeks |
| 9–10 years | 16 weeks |
| 10+ years | 12 weeks |
This is calculated on your base rate of pay for ordinary hours — it excludes overtime, bonuses, loadings, allowances, and penalty rates, so it's not the same figure as your average take-home pay.
That last line of the table isn't a typo. Redundancy pay peaks at 16 weeks for employees with 9–10 years of service, then actually drops to 12 weeks for anyone past the 10-year mark. It's a genuine, well-documented feature of the NES scale — and one most employees (and plenty of employers) don't expect.
Who isn't covered by this scale
Casual employees — no firm advance commitment to ongoing work means no NES redundancy pay.
Under 12 months' service — the NES entitlement only starts after a full year.
Small business employees — a small business employer is one with fewer than 15 employees at the time your employment ends, counting regular casuals and a working owner. Small business employers are generally exempt from paying redundancy pay under the NES (though some awards or contracts may still provide for it — worth checking). One exception: since December 2023, this exemption doesn't apply if the business only dropped below 15 staff because of redundancies made in the 6 months before it went into bankruptcy or liquidation.
Being exempt from redundancy pay does not exempt an employer from proper notice, or from paying out your other final entitlements.
What happens to your leave?
Redundancy pay is only one part of your final payout. Leave is treated differently depending on what kind it is — this is where a lot of people get caught out expecting money that isn't actually owed.
- Annual leave — always paid out in full. Whatever you've accrued and not taken gets paid out as part of your final pay, no matter why your employment ended. This applies to every employee, in every state.
- Personal/carer's (sick) leave — not paid out. Under the NES, unused sick leave is forfeited when your employment ends — it doesn't convert to cash. The only exception is if your award, agreement, or contract specifically promises otherwise.
- Long service leave — depends on your state. Unlike annual leave, this isn't set by the Fair Work Act — each state and territory has its own legislation, with different service thresholds for a redundancy payout (NSW allows a pro-rata payout after 5 years; Queensland requires 7). Check your state's scheme, since the rules genuinely differ.
Can you be made redundant while on leave — or right before it?
There's no blanket rule against being made redundant while on leave, or in the lead-up to it. But two separate protections kick in depending on your situation, and they change who has to prove what.
If you're already on parental leave, you have a statutory "return to work guarantee" — the right to go back to your old role, or if it's genuinely gone, to the nearest available equivalent role in status and pay. A redundancy during parental leave is legally possible, but only if it meets the full genuine redundancy test, and in practice these get heavily scrutinised.
Either way — during leave or in the lead-up to it — it's unlawful for a redundancy to happen because you took, requested, or gave notice that you intended to take parental leave (or because you're pregnant). This protection attaches from the moment you request or notify the leave, not just once it starts.
These claims work differently to an unfair dismissal claim. Once you show you were made redundant around the time you exercised that right, the onus flips — it's your employer who then has to prove the redundancy genuinely had nothing to do with it. It's still worth acting quickly: the same 21-day deadline applies.
What if something doesn't add up?
- Your award or enterprise agreement may offer more than the NES minimum — always check what applies to you specifically.
- A genuine redundancy can still be challenged on the payout amount — if you think your employer miscalculated your service or wrongly applied the small business exemption, you can raise this with the Fair Work Ombudsman.
- If the redundancy isn't genuine, your avenue is an unfair dismissal claim — and the clock runs from the day you were dismissed, not from when you realised something was off.
Not always, especially for a straightforward payout calculation. But if your role was refilled shortly after, you weren't consulted, or a reasonable alternative position existed and wasn't offered, it's worth getting advice before you sign a deed of release — because signing one typically ends your ability to make a claim later.
Frequently asked questions
Do I get redundancy pay if I resign?
No. Redundancy pay only applies when your employer ends your employment because your role no longer exists. If you resign — even because you suspect a redundancy is coming — you generally forfeit the entitlement.
Is redundancy pay taxed?
Genuine redundancy payments get concessional tax treatment up to a tax-free limit that's indexed and changes each financial year, with anything above that taxed as an employment termination payment. Check current thresholds on the ATO website.
Will redundancy pay affect my Centrelink payments?
Yes. Centrelink applies an "income maintenance period" to redundancy pay and leave payouts, dividing your payout by your ordinary fortnightly pay to work out how many weeks you're expected to live on it before JobSeeker or similar payments start.
Can my employer make my role "redundant" and then get someone else to do the same job?
Not lawfully. This goes directly against the genuine redundancy test. If the same role reappears under a different title, or someone else is doing your work shortly after, that's a strong sign it wasn't genuine.
How is redundancy pay calculated if I work part-time?
The same weeks-of-service scale applies — the difference is in the dollar figure, since it's based on your base rate of pay for your ordinary hours.
The bottom line: A redundancy has to be genuine to be lawful — the job disappears, you were consulted, and redeployment wasn't reasonable. If it stacks up, your severance is set by a clear formula based on your years of service. If it doesn't stack up, this may not be a redundancy at all, and the unfair dismissal clock is already running.
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