Under the National Employment Standards (NES), an employer who is defined as a small business employer is not required to provide redundancy pay. However, an employer may have redundancy pay obligations under an industrial instrument or contract of employment.
A small business employer, for the purpose of determining redundancy pay under the NES, is an employer who employs fewer than 15 employees. This is based on a simple head count of employees immediately before the relevant person was terminated, or at the time when the person was given notice of termination (whichever happened first).
When calculating the number of employees employed at a particular time, all the following factors are to be taken into account:
- all employees employed by the employer at that time are to be counted
- a casual employee is not be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis
- associated entities are taken to be one entity
- the employee being terminated, and any other employees being terminated at that time are counted.
Important! Some modern awards and pre-modern awards require certain small business employers to pay redundancy to their employees. Go to Exceptions to see if it affects you.