Redundancy is when a business no longer needs an employee’s job to be done by anyone.

Learn more about when redundancy happens and what employees are entitled to if they’re made redundant.

On this page:

• Understanding redundancy
• Video: Redundancy
• Redundancy pay
• Consulting with employees about major workplace changes
• Redundancy of 15 or more employees
• Further support for affected employees and employers
• Tools and resources
• Related information

Understanding redundancy

Redundancy happens when an employer:

• doesn't need an employee’s job to be done by anyone, or
• becomes insolvent or bankrupt.

Redundancy can happen when the business:

• introduces new technology, for example, the job can be done by a machine
• slows down due to lower sales or production
• closes down
• relocates interstate or overseas
• restructures or reorganises, including because a merger or a takeover happens.

Redundancies must be genuine.

Genuine redundancy

A genuine redundancy is when:

• the employee’s job no longer needs to be done by anyone because of changes in the employer’s business, and
• the employer followed the consultation requirements in the relevant award or  enterprise agreementAn enterprise agreement sets out minimum employment conditions and can apply to one business or a group of businesses. .

If the redundancy is genuine, the employee can't get an unfair dismissal remedy.

Not a genuine redundancy

A dismissal is not a genuine redundancy if the employer:

• still needs the employee’s job to be done by someone
• hasn’t followed any consultation requirements in the relevant award or agreement, or
• could have reasonably given the employee another job within the employer’s business or an associated entity.

If the redundancy isn’t genuine, the employee may be able to apply for an unfair dismissal remedy.

Video: Redundancy

Watch our short video on redundancy to learn about:

• when redundancy happens
• which employees are eligible for redundancy pay
• how to calculate redundancy pay.

Redundancy pay

If an employee is made redundant, they may be entitled to redundancy pay. Redundancy pay is calculated based on an employee’s length of continuous service with their employer.

For more information, visit Redundancy pay.

Consulting with employees about major workplace changes

All awards and agreements have a consultation process for when there are major changes to the workplace that are likely to have significant effects on employees. This may include redundancies.

The consultation process tells employers what they need to do if they decide to make major changes to the business.

After a decision to make major changes has been made, the employer must as soon as possible:

• notify affected employees and any representatives about the proposed changes
• provide all relevant information in writing to the employees and their representatives about the changes, including the expected effects
• discuss with employees and their representatives the introduction of the changes, their likely effects, and strategies to reduce the negative effects on the employees
• consider any ideas or suggestions raised by the employees or their representatives about the changes.

For best practice tips, visit Consultation and cooperation in the workplace.

Redundancy of 15 or more employees

If a business is considering making 15 or more employees redundant, the employer must give Services Australia written notification of the proposed dismissals as soon as possible. This must happen before the employees are made redundant.

The notice must set out the:

• reasons for the dismissals
• number and categories of the employees likely to be affected
• timing of the dismissals.

An employer must notify or consult with a union if at least 1 employee is a union member.

Failure to comply with these requirements may result in penalties.

For more information and access to a notification template, visit Services Australia – Redundancy information for employers.

Further support for redundant employees and their employers

For information about what to do if you’ve been made redundant or are looking for a new job, visit the What’s Next website on the Department of Employment and Workplace Relations website. This support is provided under Workforce Australia Services.

For more information about the services available, visit Related government sites.

Source reference for page: Fair Work Act 2009 sections 119, 385, 389, 530, 534

Tools and resources

• Notice and Redundancy Calculator
• Termination of employment letter – redundancy template Termination of employment letter – redundancy template
• Library – Redundancy pay and leaving during a notice period
• Fair Work Commission – Unfair dismissal eligibility quiz
• Notice of termination and redundancy pay fact sheet

Related information

• Redundancy pay
• Final pay
• Unfair dismissal
• Bankruptcy and liquidation
• Workforce Australia - Next steps if you lose your job
• I’ve lost my job and I’m not sure what I’m entitled to