Redunancy pay and steps

[Elaine Li]

Hi can anyone advise me on the appropriate steps to follow and how to calculate any redundancy pay and/or any other severance due, Thank you very much.

[Qld IR Consultant]

Elaine, you would need to reference the applicable Modern Award dependant on job classification etc. Notice period is covered in the NES which is available form the Fair Work Ombudsman website. Redundancy payments include payout of accrued annual leave, as well as notice period and weeks per years of service.

The first question you should be asking is the job really redundant?...Have I followed a robust redundancy process?...Remember even though you make someone redundant they can still bring an unfair dismissal claim against you.....

Good luck!!

[Tasman McManis]

Hi Elaine, please see following post.

[Tasman McManis]

Hi Elaine, once you have confirmed that you have a genuine redundancy and established the person's entitlement you will be able to work out how much they should be paid. Under the Fair Work Act there are prescribed redundancy entitelments based on years of service + the notice period. Once you have this information, and remember that your organisation can offer a higher payment than the minimum stated in the act if it wishes. There are specific taxation rates for genuine redundancy payments and the relevant details can be found on the ATO internet site. Go to the site and search for Redundancy Payments and you should have enough information to work through the payout requirements. Cheers Tasman

[Elaine Li]

Hi Tasman, Thank you for all of your advise.

people tell me that I need to get the impacted employee to sign a "Deed of Release", is this a requirement ?
of we can only present him with a letter of notice/agreement to release and show in the final payment on the day we present him with the let go letter? what do you think ?

[hrprofessional]

Elaine thanks for your question!

There are two parts of your question;

REDUNDANCY
- The redundancy process
This includes fair selection, redeployment, consultation (look at relevant award under the section dealing with 'major workplace change' or the relevant enterprise agreement) and you must have genuine operational reasons.

- redundancy entitlements
Notice can either be paid out to the employee or you can ask them to work that period. The notice period may come from the National Employment Standards if there is nothing more generous in a contract or enterprise agreement. This entitlement will depend on years worked and if they are a full time/part time employee as opposed to a casual (occasionally regular and systematic casuals also try and make the argument they are entitled to redundancy, but that requires further analysis).

Redundancy pay may come from the National Employment Standards (NES) or could come from a pre-modern award (potentially) or other source such as an enterprise agreement or contract if the entitlement in those instruments is more generous than the NES.

Annual leave will need to be paid out. According to the Fair Work Ombudsman if the employee receives annual leave loading that is also paid on termination.

Long service leave entitlements under the relevant state legislation or pre modern award.

I have written a guide on redundancy entitlements and the redundancy process which goes into a lot more detail.
HR Professional

DEED OF RELEASE
You need to obtain legal advice on the use of a deed of release. Keep in mind that presenting a deed may make the employee feel that you are somehow doing the wrong thing by him and may push him to engage a solicitor. Also presenting a deed of release before terminating someone may be taken into consideration if the employee was to make an unfair dismissal claim as the dismissal was clearly not a genuine redundancy (and the deed is presented as evidence that you targeted him, attempted to bind him to confidentiality, and then terminated him on an unfair basis).

Some companies present the deed once they have gone through the entire redundancy process as a formality before the employee leaves the company. The difficulty is there is no obligation on the employee to sign the deed, and you still must pay him his entitlements and can't withhold them if he refuses.