Redundancy pay & entitlements

When an employee’s job is made redundant, their employer may need to pay them redundancy pay (also known as severance pay).

Redundancy pay

Use our Notice and Redundancy Calculator to calculate redundancy pay.

Redundancy pay doesn't need to be paid in some circumstances, such as if the employer is a small businesses or the employee is a casual. To find out when redundancy doesn't need to be paid, visit Who doesn't get redundancy pay.

The amount of redundancy pay the employee gets is based on their continuous service with their employer. Continuous service is the length of time they're employed by the business and doesn't include periods of unpaid leave. Read about whether casual service counts for redundancy pay in our Library.

If you're covered by a registered agreement, check the terms of your agreement for information about how much redundancy needs to be paid out and other entitlements. To find a registered agreement, go to the Fair Work Commission website external-icon.png.

Find information about specific redundancy entitlements in your award by selecting from the list below.

Building and Construction Award

Based on what you've told us, it looks like you're covered by the Building and Construction General On-site Award [MA000020].

A person under the Building and Construction Award is redundant if:

This means an employer has to pay redundancy when an employee is dismissed or they resign. This includes small business employers.

An employer has to pay out the following minimum redundancy pay:

Period of continuous service Redundancy pay
Less than a year 1.75 hours for each completed week of service (doesn't apply if the employee resigns)
1 year but less than 2 years 2.4 weeks pay plus 1.75 hours for each completed week of service in the second year (capped at 4.8 weeks)
2 years but less than 3 years 4.8 weeks pay plus 1.6 hours for each completed week of service in the third year (capped at 7 weeks)
3 years but less than 4 years 7 weeks pay plus 0.73 hours for each completed week of service in the fourth year (capped at 8 weeks)
4 years or more 8 weeks pay

A weeks pay is the ordinary time pay rate an employee was being paid when their employment ended.

Any outstanding entitlements also need to be paid out – including annual leave and long service leave that the employee hasn't taken.

Any period of casual service with the employer will not count towards years of service for calculating redundancy entitlements.

An employer can make contributions to a redundancy pay scheme to offset an employee’s redundancy pay entitlement. Check the Building and Construction Award for information on redundancy pay schemes.

Notice periods

An employer has to give the following minimum notice periods when making an employee’s job redundant. If the notice period isn’t worked, this is paid out as well as the redundancy pay.

Period of continuous service Notice
Less than 1 year 1 week
1 - 3 years 2 week
3 -5 years 3 week
Over 5 years 4 week

Employees over 45 years old who have worked for the employer for at least 2 years get an extra 1 week notice.

Apprentices and redundancy pay

Apprentices aren't entitled to redundancy while they’re under a training contract.

An employee who has finished their apprenticeship is entitled to redundancy. Their years as an apprentice will be counted when calculating redundancy pay and notice amounts if:

  • their employer kept them on for a further 12 months after the apprenticeship was completed or
  • they were terminated at the end of their apprenticeship but rehired with the same employer within 6 months.

Other redundancy entitlements

The redundancy entitlements below apply to all employees covered by the Building and Construction Award.

Looking for a new job during the notice period

An employee who has received notice of redundancy is allowed at least 1 paid day off, to look for another job.

The time off is to be taken at times that are convenient to the employee after consultation with their employer.

Employee leaving during the notice period

An employee who has received notice of redundancy can leave their job during their notice period.

The employee still has to get the redundancy pay and other entitlements they would have received if they had remained in their job until the end of the notice period.

They aren't entitled to payment for the remaining notice period they didn't work.

To find out more about training contracts, go to Apprentice and trainee pay rates.

To find out more about who this award applies to, go to the Building and Construction Award summary.

Source reference: Building and Construction General On-site Award [MA000020] clause 14.2(e) and 41 external-icon.png

You do not have javascript enabled. Please select your preferred industry from the links below, to view your tailored content for this section.

Employees who were made redundant before 31 December 2014 may have been entitled to more generous redundancy pay under an old award. If you think this may apply to you or for more information, Contact us.

Reducing redundancy pay

An employer can apply to the Fair Work Commission to have the amount of redundancy they have to pay reduced if:

  • the employer finds other acceptable employment for the employee, or
  • the employer can't afford the full redundancy amount.

For more information, check the application to vary redundancy pay form on the Fair Work Commission website external-icon.png.

Tools and resources

Related information

Think a mistake might have been made?

For employees:

If you’ve lost your job, contact the Fair Work Commission (the Commission) first if you think you were sacked because of:

  • discrimination
  • a reason that is harsh, unjust or unreasonable
  • another protected right.

You have 21 days starting from the day after you were dismissed to lodge an application with the Fair Work Commission. Check the information at the Commission website to find out if you can apply for:

If you think you haven’t been paid everything you’re owed:

  • read about Notice and final pay to find out what you should get
  • see our Fixing a workplace problem section for practical advice on:
    • talking to your employer about fixing your notice and final pay if it’s wrong
    • getting help from us if you can’t resolve it.

For employers:

Want to save this information for later?

If you might need to read this information again, save it for later so you can access it quickly and easily.

Page reference No: 2045