Managing people

Is redundancy pay due before 12 months?

Are employees entitled to redundancy pay if they are given notice before completing 12 months’ service?

Are employees entitled to redundancy pay if they are given notice before completing 12 months’ service?

 

Entitlement to redundancy pay

In this case, there is no entitlement to redundancy pay because there is a different provision under the National Employment Standards (NES) where an employee is approaching 12 months of service.

The Fair Work Act 2009 (s121(1)) provides that the redundancy pay provisions under the NES do not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in s117(1) (whichever happened first), the employee’s period of continuous service with the employer is less than 12 months.

This means that if employees are given notice before they have completed 12 months of continuous service with an employer, the employee is not entitled to redundancy pay, despite completing 12 months of service by the date of termination. 

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