Know Your Rights: Redundancy and what to do next
No matter the circumstances, being made redundant can be stressful and challenging. As disruptive as it is, the experience can have its upsides. Knowing your rights is essential to making sure you receive what your entitlements and can help you navigate the transition from one job to the next.
What is redundancy?
Redundancy is when a role isn’t needed any more, resulting in the termination of an employment contract. This differs from other types of terminations, such as those for poor performance or misconduct, because redundancy is about the role itself, not the individual, says Andrew Jewell, Principal at Jewell Hancock Employment Lawyers.
Some of the most common reasons for redundancy are business downturns, company restructuring, technological changes in the workplace, and business closure or relocation.
Redundancy rights and entitlements for employees
Under the Fair Work Act 2009, employees are entitled to a minimum notice period, as with any dismissal, and to redundancy pay if they meet certain requirements.
Redundancy pay is based on your length of continuous service and is designed to help cushion the financial impact of job loss. Typically, only employees who have been with a business for at least 12 months are entitled to redundancy pay, but employers can choose to offer a payout to people who haven’t met that criterion. Employees with longer service also receive higher redundancy pay, as set out in the Fair Work Act’s redundancy pay scale.
The exception is for businesses with fewer than 15 employees, who are usually exempt from owing redundancy pay. Specific details around the notice period and your redundancy entitlements will be in your contract, enterprise agreement or award.
Along with redundancy pay, an employee’s final payout should include:
- Unused annual leave
- Accrued long-service leave
- Any pay in lieu of notice
“While sick leave isn’t paid out on termination, employees are often unaware that they can still use their accrued sick leave during the notice period,” says Jewell.
“Although there are many legitimate reasons for redundancy, sometimes employers use redundancy as an excuse to get rid of employees for illegal reasons – such as age, pregnancy, or because an employee made an employment complaint,” says Jewell.
If you believe this has happened to you, you may be able to lodge an unfair dismissal or discrimination claim. In this case, it’s a good idea to first seek advice from an employment lawyer or your union.
Your rights under the Fair Work Act 2009:
- Your employer should have consulted you about a potential redundancy (if this is required by your contract, award, or enterprise agreement). This includes being informed about the reasons, possible alternatives to accepting redundancy, and having the opportunity to give feedback.
- Employers must genuinely consider redeployment opportunities as an alternative to redundancy. This means offering you another suitable role in the business or an associated company.
- You must receive proper notice of redundancy, with the length depending on your tenure.
- Expect a fair and objective selection process, free from discrimination or bias. This means your employer should use clear, non-discriminatory criteria when making decisions around who to make redundant, and to ensure the process is free from bias, whether conscious or unconscious.
- You’re allowed to bring a support person such as a union rep, colleague, or legal advisor to redundancy meetings.
- You can challenge a redundancy dismissal through an unfair dismissal claim if you have at least six months’ continuous service and believe the redundancy was not genuine, or the process was unfair or discriminatory.
- You must be paid all owed wages, leave entitlements, redundancy pay (if eligible), and other contractual payments at the end of employment.
If you have questions or concerns about your rights, always seek advice and support from the Fair Work Ombudsman, your union, legal aid services, or an employment advocacy group.
How to deal with redundancy
Being made redundant can be an intense emotional experience.
“I've been made redundant twice in my career, so I know firsthand how all over the place your feelings can be,” says Organisational Psychologist Dr Michelle Pizer.
“Redundancy can bring real grief. You might feel shock, anger, sadness, guilt, even relief – and sometimes all in the same day.”
This is because not only have you lost your job, but you’ve also often lost your routine, financial security and part of your professional identity. The future may suddenly seem unclear.
During this time, it’s critical to take care of your wellbeing and find healthy ways to deal with the change. Dr Pizer’s tips include:
- Be kind to yourself. Treat yourself as you would a friend going through the same situation. Recognise negative emotions, but don’t let them take over.
- Maintain healthy habits. Eat well, sleep enough, move your body, and stay connected socially. Even a 10- to 15-minute walk can boost mood and improve focus.
- Focus on what you can control. While you can’t change the redundancy, you can update your professional profile, reconnect with your network, and stay engaged in your industry.
- Plan your days. Approach job searching like a part-time role with dedicated time for applications, networking, and skill-building, but also schedule breaks to recharge.
Going through redundancy can make you feel isolated, so reach out to friends, family or organisations for support if you need it. Look to your network, but think broader than your immediate circle, says Pizer, like past colleagues.
Many employers also offer outplacement to employees during redundancy. This is a service designed to help you move into your next job more smoothly and often includes career coaching, resume support and other resources to help with the transition. You may be able to access Employee Assistance Programs or government services for job seekers, and if you’re in a position to, reach out to career coaches or psychologists for personalised support.
What to do after redundancy: Practical next steps
When you’ve been made redundant, it’s important to maintain momentum and start your job hunt, to minimise your period without an income.
Here are practical steps that can help you transition smoothly into your next role:
- Review your finances. One of the most stressful parts of redundancy is losing income. Take stock of your finances, including your redundancy pay, and budget for your time out of work. Check Services Australia to see if you’re entitled to any support payments during your job search.
- Update your résumé. Review and update your resumé with your latest experience, skills and qualifications.
- Search for new opportunities. Start looking for your next role through a range of channels, such as searching via SEEK and talking to your network. “The hidden job market is real,” says Pizer. “The first job I got after redundancy came through my favourite lecturer from university.”
- Use the time to upskill. Build your skills, including using AI (if it’s relevant to your industry), which will have a huge impact on many workplaces in the coming years. There are free and low-cost courses available, both online and in person.
It’s important to remember that redundancy doesn't define you, says Pizer. “It's one chapter, not your whole story. And while it may not feel like it now, there is life on the other side of it. You still have value, skills and potential that no redundancy can take away.”
