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Your questions answered: Maximum redundancy pay

By Portner Press on December 14th, 2018
  1. Termination of Employment
  2. Redundancy

 

Q
If we are going to make an employee redundant, is there a threshold/maximum amount that we need to pay when the employee’s salary is over a certain level?

 

A
No. Under the Fair Work Act 2009 (Cth) National Employment Standards (NES), there is no maximum monetary amount that an employee can be paid as redundancy pay.

An employee is entitled to a certain number of weeks’ redundancy pay depending on their length of continuous service. For example, an employee who has been employed for 5–6 years will be entitled to 10 weeks’ redundancy pay. This is paid at the employee’s base rate of pay for their ordinary hours of work.

The NES sets out an employee’s minimum redundancy pay entitlement. It may be higher depending on the terms of the industrial instruments, employment contracts and workplace policies that apply to your business.

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