Redundancy

In this guide, we explain what a genuine redundancy is, how redundancy pay works, and what you can do if you believe your redundancy wasn't handled properly by the business.

If you’ve recently been made redundant, or you think it might happen, you’ve come to the right place. MKI Legal advises on redundancy rights all the time, so we see the same issues again and again. A redundancy happens when the business no longer requires your job to be done by anyone.

Remember, it’s the position that is made redundant, not the person. A redundancy should not be about your performance, attitude or behaviour. It usually happens because of a downturn, new technology, or a change in the way the business is organised, such as a restructure.

There are two separate questions: was the redundancy genuine (which decides whether you can bring an unfair dismissal claim), and were you paid correctly (notice, redundancy pay and leave). We deal with both below.

Redundancy & Unfair Dismissal – How Does It Work?

A dismissal that is a genuine redundancy cannot be an unfair dismissal (s 385(d) of the Fair Work Act 2009 (Cth)). If the redundancy was not genuine, you may be able to lodge an unfair dismissal claim, and the Fair Work Commission then looks at whether the dismissal was harsh, unjust or unreasonable.

If the real reason for selecting you was something unlawful, such as a complaint you made, leave you took, or a personal attribute, a general protections claim may be available as well or instead, even if the redundancy was otherwise genuine.

So how does this work?

Deadlines Apply

You have 21 days from the day your dismissal took effect to lodge an unfair dismissal or general protections claim with the Fair Work Commission. If you are working out a notice period, that is usually the last day of your notice; if you were paid in lieu, it is usually the day you were told. A late claim is accepted only in exceptional circumstances.

If you work in the WA state system (for example for a WA government agency, a WA local government, or a sole trader or partnership), different rules apply, including a 28-day limit and no statutory genuine redundancy exclusion. See our WA state system guide.

Employee Must Be Eligible

Not everyone can lodge an unfair dismissal claim. In summary:

You must have completed the minimum employment period: 6 months, or 12 months if the employer had fewer than 15 employees.

You must be covered by a modern award or enterprise agreement, or earn less than the high income threshold: $190,100 for dismissals from 1 July 2026 ($183,100 in 2025-26), not counting superannuation. The threshold changes every 1 July.

You must have been dismissed. A redundancy imposed on you is a dismissal; if you volunteered for redundancy, get advice about whether that counts.

How Is a Redundancy Unfair?

Under s 389 of the Fair Work Act, a redundancy is genuine only if all three of the following are true. If any one is missing, the redundancy is not genuine.

1. The Job Is No Longer Needed

Your employer must no longer require your job to be done by anyone because of changes in the operational requirements of the business. Spreading your duties among other staff can still be a genuine redundancy. But if the business is advertising the same job, has hired someone to do it, or is simply using the label to get rid of you for another reason, it is not. We have a lot of experience with sham redundancies.

2. Consultation

If a modern award or enterprise agreement applied to you, your employer must have complied with its consultation obligations: usually telling you about the proposed change early, giving you the relevant information in writing, and genuinely considering what you say before the decision is made. Failing to consult as the award or agreement requires means the redundancy is not genuine.

3. Redeployment

A redundancy is not genuine if it would have been reasonable in all the circumstances to redeploy you within the business or a related (associated) entity. The Commission looks at the nature of any available role, the skills and qualifications it needs, where it is, and what it pays (Ulan Coal Mines Ltd v Honeysett [2010] FWAFB 7578). A lower-paid or part-time role you would have accepted can count. In 2025 the High Court held that the question is what was reasonable within the employer’s actual business, which in some circumstances can include work the employer was having contractors or labour hire workers do (Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29).

The Fair Work Commission’s page on redundancy explains the same rules.

A Different Type of Claim

Unfair dismissal is only one type of claim. If you’ve been made redundant and are not eligible for unfair dismissal, you may still have a general protections claim if you were selected for redundancy because you:

exercised your employment rights (for example, took annual leave, sick leave or parental leave, or asked for flexible work);

made a complaint or inquiry about your employment (verbal or written);

had a medical condition or disability;

had family or carer’s responsibilities;

were pregnant;

had another protected attribute, such as your race, sex, sexual orientation, age, religion, political opinion or national extraction; or

were temporarily off work because of illness or injury.

For a general protections claim, it doesn’t matter how much you earned or how long you worked there. But you still only have 21 days from the day the dismissal took effect.

Correct redundancy pay

You must be paid the correct redundancy pay. If your contract, award or enterprise agreement provides more generous redundancy pay, that applies. Otherwise the minimum is set by the National Employment Standards in the Fair Work Act (s 119), shown below. Redundancy pay is on top of notice or pay in lieu of notice, and your unused annual leave.

Redundancy pay under the Act is paid at your base rate of pay for your ordinary hours, so it does not include overtime, penalty rates, loadings, allowances or bonuses. The Fair Work Ombudsman’s redundancy page and its notice and redundancy calculator are useful checks.

Minimum entitlements (Federal System)

The Fair Work Act applies to most businesses and employees in Australia. In WA it covers employees of companies (Pty Ltd and similar) that trade, which is most private-sector employers.

The Act sets the minimum redundancy pay by your length of continuous service (casual service does not count). The table below applies to the national system.

Minimum entitlements (Federal System)

Period of continuous service	Redundancy pay
At least 1 year but less than 2 years	4 weeks
At least 2 years but less than 3 years	6 weeks
At least 3 years but less than 4 years	7 weeks
At least 4 years but less than 5 years	8 weeks
At least 5 years but less than 6 years	10 weeks
At least 6 years but less than 7 years	11 weeks
At least 7 years but less than 8 years	13 weeks
At least 8 years but less than 9 years	14 weeks
At least 9 years but less than 10 years	16 weeks
At least 10 years	12 weeks

The drop at 10 years is correct: it is how the Act is written. If your contract, award or agreement is more generous, that applies instead.

WA state system employees, including WA public sector employees, have their own redundancy arrangements. See our WA state system guide.

Excluded from redundancy pay

Under the Fair Work Act (ss 121 and 123), these employees are not entitled to the minimum redundancy pay:

employees with less than 12 months’ continuous service;

employees of a small business employer (fewer than 15 employees), unless the business became small because of job losses in the lead-up to its insolvency or bankruptcy;

casual employees;

employees engaged for a genuinely specified period, task or season;

employees dismissed for serious misconduct;

apprentices, and trainees employed only for the length of a training arrangement; and

employees covered by an industry-specific redundancy scheme in their award or agreement, which applies instead.

Your employer can also ask the Fair Work Commission to reduce the redundancy pay, even to nil, if it obtains other acceptable employment for you or cannot afford to pay (s 120). If you turn down a suitable alternative job your employer arranged, your redundancy pay may be reduced.

Free Discussion

If you have been made redundant, contact us for a free discussion about your rights. We can often tell you over the phone whether you may have a claim. Remember, you have 21 days from the day the dismissal took effect to lodge a claim with the Fair Work Commission.