Redundancy occurs when an employer decides that the job an employee has been doing is no longer needed. This decision is based on circumstances other than the ordinary and customary turnover of labour.
Reasons why a position is made redundant include:
Employers and employees need to know what redundancy guidelines apply to them. Refer to your award, agreement or the Industrial Relations Act 1999 (PDF, 1.9MB) for information about redundancy procedures and entitlements. In this regard, most awards and agreements will contain redundancy provisions which reflect the current Statement of Policy for Termination of Employment, and Introduction of Changes and Redundancy (current TCR Policy) of the Queensland Industrial Relations Commission (QIRC).
Note: Until varied, some awards and agreements may still refer to the previous Termination of Employment, Introduction of Changes and Redundancy clause (previous TCR Policy) as laid down in a Declaration of Policy by the QIRC in June 1987.
From 1 September 2005 the Industrial Relations Act 1999 has been amended to provide that an employee covered by an award or agreement (State or Federal) made after this date will have an entitlement to redundancy payments identical to those contained in the Statement of Policy unless the award or agreement excludes the relevant condition or provides an alternative provision.
This amendment does not apply if the application to certify an agreement was made on or before 1 September 2005.
Yes. Where an employer decides to make a position or positions redundant, an employee or a union (than can represent the employee's industrial interests), can apply to the QIRC for an order in relation to severance pay. The severance allowance considered will accord with national law and practice i.e., similar provisions to those contained in the TCR Policy including any exemptions.
An employer is required to consult with their employees and any relevant unions before making any position redundant.
Employers may also be required to notify the Commonwealth agency responsible for helping unemployed people to find work (currently Centrelink 
).
Most awards and agreements set out employees' redundancy entitlements including the following notice periods, time off for job search activities and severance payments.
The legislation prescribes the following minimum period of notice that an employer must give an employee. These apply unless an award or agreement sets a more favourable entitlement for the employee.
| Period of continuous service | Notice Period |
|---|---|
| Not more than 1 year | 1 week |
| More than 1 year but not more than 3 years | 2 weeks |
| More than 3 years but not more than 5 years | 3 weeks |
| More than 5 years | 4 weeks |
If an employee is over 45 and has worked with the same employer continuously for two years, the minimum notice period is increased by one week. Employers may also choose to give payment in lieu of notice or a combination time notice and payment in lieu to equal the required notice period.
When employees are made redundant, they are entitled to time off work to seek other employment. For each week of their notice period, they are entitled to one day without loss of pay to look for work.
Where more than one day's paid leave is allowed during the notice period, an employer can require proof of attendance at an interview, e.g., statutory declaration.
In addition to the notice period prescribed above, an employee whose employment is made redundant is entitled to the following amounts of severance pay:
| Period of continuous service |
Severance pay |
|---|---|
| Less than 1 year |
nil |
| 1 year but not more than 2 years |
4 |
| More than 2 years but not more than 3 years |
6 |
| More than 3 years but not more than 4years |
7 |
| More than 4 years but not more than 5years |
8 |
| More than 5 years but not more than 6 years |
9 |
| More than 6 years but not more than 7 years |
10 |
| More than 7 years but not more than 8 years |
11 |
| More than 8 years but not more than 9 years |
12 |
| More than 9 years but not more than 10 years |
13 |
| More than 10 years but not more than 11 years |
14 |
| More than 11 years but not more than 12 years |
15 |
| More than 12 years |
16 |
* Weeks' pay means the ordinary time rate of pay for the employee and excludes overtime, penalty rates, disability allowances, shift allowances, special rates, fares and travelling time allowances, bonuses and any other ancillary payments.
Where commission payments (in whole or in part) are a feature of the award, section 7 of the Industrial Relations Regulations 2000 offers assistance in the method of calculation to be adopted, i.e. average weekly remuneration in the 3 months before dismissal.
Yes. Under award and agreement provisions, redundancy and severance pay provisions do not normally apply to employees who are:
employees; or employees, where seasonal employment is a feature of the award Yes. Employers are not required to observe redundancy and/or severance benefits provisions in the following instances:
Note: The QIRC may amend this exemption if it is satisfied that it would operate unfairly in a particular case, or in the instance of contrived arrangements.
Where a position is made redundant, the employee currently in that position may be offered a transfer to lower paid duties. A transferring employee is entitled to the same period of notice they would receive for termination.
Payment, equal to the difference between the former amounts the employer would be liable to pay and the new lower amount the employer is liable to pay for the number of weeks of notice, may be made in lieu of such notice.
The amounts must be worked out on the basis of:
When a new employer purchases a business from an existing employer they may continue to engage the existing employees. This transfer of ownership is referred to as a Transmission of Business.
"Business" in this section includes trade, process, business or occupation and includes a part or subsidiary (as taken from Corporations Law), of any such business.
"Transmission" includes transfer, conveyance, assignment or succession whether by agreement or by operation of law.
Severance pay is not payable in the following situations where a transmission of business has occurred:
Employers can apply to the Queensland Industrial Relations Commission for relief from the obligation to make severance payments in circumstances where:
Employees who believe their dismissal was unnecessary, harsh, unjust or unreasonable can apply to the Queensland Industrial Relations Commission for a hearing. The Commission will decide whether a dismissal is harsh, unjust or unreasonable by considering:
The Act ensures that there is a balance between questions of process and the merits of the case. The process involved in making the dismissal is just one of several factors considered in deciding whether a dismissal is unfair.
Wageline's fact sheet on:
Dismissal from employment:
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