Q&A: Redundancy for WA employees

A redundancy occurs if the job you were doing no longer exists and isn’t being done by anyone. A redundancy usually occurs because a business or other organisation is restructuring, or is closing down for good.

If you have been told your job is redundant, but another employee begins doing your same job, it might be that a “sham” redundancy has occurred.

However, keep in mind that it’s lawful for your duties to be given to other employees, as long as there is no single employee doing the same job (or substantially the same job). So if:

• your duties are still being done, but split between a number of other employees; or
• your duties are being done by a new employee, but they are also doing additional tasks as part of a new and different job;

then it might be that the redundancy is lawful, and you can’t challenge it.

Some, but not all employees are entitled to redundancy pay if their job is made redundant.

Redundancies are lawful if done correctly. If a redundancy has occurred properly and you have been paid all of the entitlements that you are owed, then you don’t have to do anything under workplace laws.

You may want to make further enquiries or make a legal claim in the following circumstances:

• The redundancy occurred properly, but you think you haven’t been paid the entitlements that you are owed.
• The redundancy didn’t occur properly. For example, you weren’t consulted prior to the redundancy.
• You have lost your job, but you don’t believe it has truly been made redundant (for example, because someone else is now doing your job).

If you are a casual employee, you should have been paid for all work you performed up until your job finished, but generally you aren’t entitled to anything else.

If you are a permanent employee, you should be paid:

• all outstanding wages for work performed up until your job finished;
• pay in lieu of notice, if you weren’t given the full amount of notice that you were entitled to;
• all untaken annual leave;
• long service leave if you are entitled to it; and
• redundancy pay if you are entitled to it.

For more information on other entitlements, see our publication Q&A: Minimum conditions of employment for WA employees.

Redundancy pay is a “minimum entitlement” under workplace laws. This means that employers are required by law to provide redundancy pay in certain situations. Different rules might apply if you have a more generous redundancy entitlement in your contract (discussed further below).

You might be entitled to redundancy pay if your job has been made redundant. However, there are some circumstances where you may be excluded from redundancy pay under minimum entitlement laws:

• if you were a casual employee at the time of the redundancy;
• if you were employed for less than 12 months before your job finished;
• if your employer had fewer than 15 employees at the time of the redundancy; and
• if you refused an offer of acceptable alternative employment.

12 months employment

Generally, when figuring out if you were employed 12 months, you can only count the time that you were employed as a permanent employee. So, if you were a casual first, but then changed to a permanent employee, you can’t count the time you were employed as a casual.

Fewer than 15 employees

When figuring out how many employees your employer has, you can only count permanent employees and regular casuals. Note that you can also count employees of “associated entities”. So, if the owner of the organisation that employs you owns other businesses as well, it may be that the employees of the other businesses can be included in the count.

Acceptable alternative employment

You may be excluded from redundancy pay if you refuse an offer of acceptable alternative employment. If your employer offers you a different role to keep you employed, you can’t simply refuse it and choose to take redundancy pay instead. If it’s an acceptable role and you refuse it, your employer may be able to make an application to reduce or remove your entitlement to redundancy pay.

The main factor taken into consideration is pay. If you refuse an alternative job that pays more, or the same, or almost the same as your redundant role, then you may not receive redundancy pay. In some circumstances, a job offer might not be considered “acceptable” alternative employment even if the pay is the same. For example, if the alternative job is significantly different in nature and requires a completely different skillset and training, it might not be considered “acceptable”, regardless of pay.

Contractual entitlements

You might also be entitled to redundancy pay under your contract. Your contract can’t remove your right to redundancy pay, but it can provide a more generous entitlement. For example, you might have a contract that says all employees are entitled to redundancy pay if their job is made redundant.

This could mean that an employee who has worked for less than 12 months is still entitled to redundancy pay under the contract. It could also mean that all employees are entitled, even if the business has less than 15 employees. However, it depends on how the contract is written as a whole and it may be that you need legal advice to help figure out if a redundancy term in your contract provides a more generous entitlement. For more information, see our publication Q&A: Employment contracts for WA employees.

Since redundancy pay has become a minimum entitlement under law, it is relatively rare for a contract to provide for a different entitlement.

When you are told your job is redundant but someone else begins doing your old job, we call it a “sham” redundancy.

You should start by considering whether the job being performed is the same as yours. If there are additional duties or substantial changes, then it may be that it is a different job, and your job is still considered redundant.

If your old role is being performed by a contractor and not an employee, it’s likely also a different job, even if the duties are similar or the same. See the question below on outsourcing for more information.

If you aren’t sure, you may wish to write to your former employer and ask them how the new job being performed is different to yours. If they don’t respond or you don’t believe their answer is accurate, then you may wish to complain to a government regulator or make a legal claim. However, you need to assess the likelihood of the redundancy being a “sham”, as it can take time and effort to pursue a legal claim.

You need to consider what the possible outcomes could be, and what the likelihood of success is. If you aren’t entitled to redundancy pay and the job is probably a bit different, then it’s unlikely to be worth making a claim.

If you think a “sham” redundancy has occurred, then you may have been dismissed without a good reason – and therefore, you may be able to make an unfair dismissal claim.

Not all employees are eligible to make an unfair dismissal claim. You should also consider the outcome of making a claim. If you have been paid redundancy pay, it’s likely that this would be subtracted from any compensation you are awarded as part of an unfair dismissal claim.

For further information see our publications:

Q&A: Dismissal for WA employees

Claim guide: Unfair dismissal for national system employees

Claim guide: Unfair dismissal for state system employees

Outsourcing happens when your job continues to be done by a person who is employed by an outside employer. In most situations this outside employer is a “labour hire” company.

If your job has been outsourced, then it is normally considered a redundancy. Even though your duties are still being done, the “job” that you held was an agreement between you and your employer. This agreement no longer exists, and a new and different contract is in place.

So, if your job has been outsourced and you are eligible for redundancy pay – it’s likely that you should be paid redundancy pay. This is the case even if you are still performing the same job yourself but being paid by a labour hire company.

It is important that you are aware that certain types of outsourcing are not lawful. Your employer is not allowed to dismiss you for the purpose of re-hiring you as a contractor, regardless of whether you receive redundancy pay.

If this has happened, you may be able to make a general protections claim (if you are a national system employee), or a protection of employee rights claim (if you are a state system employee). For further information see our publications:

Claim guide: General protections for national system employees

Claim guide: Protection of employee rights for state system employees

It may be that you believe the redundancy itself was genuine, but you don’t believe that you should have been selected for redundancy. Unfortunately, there are no laws that set out who should be selected for redundancy. You can’t make a legal complaint on the basis that you were a better employee than someone else who wasn’t selected for redundancy, or because you were employed for longer than someone else who wasn’t selected.

However, there are laws that prevent you being selected for prohibited reasons, which include discriminatory reasons. You may have a legal claim if you were selected for one of the following reasons:

• because of your age, race, sex, religion, disability, or other protected characteristic under anti-discrimination laws. For more information see our publication: “Q&A: Workplace discrimination for WA workers”.
• because you made a complaint or inquiry to your employer about your work. For more information see our publication “Q&A: protected complaints and actions for WA workers”
• to make you an independent contractor, where you will be doing the same work. For more information, see our publication: “Q&A: Contractor or employee for WA workers”.

If you are a national system employee, you may be able to make an unfair dismissal claim on the basis that the redundancy was not “genuine”.

For a redundancy to be considered “genuine” in the national system, the employer needs to be able to demonstrate that:

• the role was no longer needed to be performed by anyone;
• consultation was carried out (if required by a modern award or enterprise agreement); and
• it was not reasonable to redeploy the employee within the organisation or an associated entity.

Redeployment means moving you to another available role. If you think there was another role you could have performed and you weren’t considered for it, the redundancy may not have been “genuine” and you could challenge it with an unfair dismissal claim.

There are a few things that are considered when determining whether redeployment would have been reasonable, including:

• if a job existed for you to move to;
• the type of available job;
• the qualifications you might need to have done the available job;
• your skills, qualifications, and experience;
• the location of the available job; and
• the pay for the available job.

There are eligibility criteria for unfair dismissal claims, not all employees can make this type of claim. For further information see our publications

Q&A: Dismissal for WA employees

Claim Guide: Unfair dismissal for national system employees

If your role is not made genuinely redundant, you may be able to make a legal claim called an unfair dismissal claim because your employment has ended in a harsh, unjust, or unfair way. For more information, see our publication

Claim guide: Unfair dismissal for national system employees

Claim guide: Unfair dismissal for state system employees

If you are a national system employee, and your employment is covered by a modern award or enterprise agreement, then your employer may need to speak with you before deciding to make your role redundant. Most awards and agreements have a “consultation clause” that requires consultation before major changes.

If they don’t speak with you, then there may have been a breach of the consultation clause in the award or agreement.

This kind of conversation needs to happen before the employer decides to make your role redundant, and it must be meaningful.

If you are a state system employee, your employer has obligations under an industrial instrument called the General Order on Termination, Change and Redundancy. Your employer must write to you to tell you about their decision. They also need to speak with all employees that are impacted by the decision. The employer must do this as soon as possible after they have made the decision to make your role redundant. The employer must write and talk to you about:

• when the redundancy will happen;
• the reasons for the redundancy;
• who will be impacted;
• the likely impacts on you and other employees; and
• things the employer has done, or will do, to minimise the negative impacts on you and other employees.

If you think you should have been consulted and you weren’t, you could make a claim for a breach of the instrument that provided the obligation to consult.

Keep in mind however, that compensation may be limited for this type of claim. Even if you are successful, the court or commission would look at the position you would have been in if you had been consulted. If it’s likely you would have been redundant even if you had been properly consulted, then it may be hard to demonstrate significant losses justifying compensation.

If your employer has fewer than 15 employees, you may not be entitled to redundancy pay.

You may still be able to make an unfair dismissal claim if you believe that your role was not made genuinely redundant if:

• you have worked for the employer for 12 months or more; and
• your employer did not comply with any of the following rules:
  • your employer must give you a reason for your role being made redundant.
  • the reason must be valid, and based on your conduct or capacity to do the job.
  • you must be warned that your job is at risk of being made redundant.
  • you must be given a chance to response to the warning and to solve the problem.

If you are entitled to redundancy pay and your employer hasn’t paid you for this entitlement, you should refer to our publication Claim guide: Unpaid minimum entitlements for WA employees.

Sometimes employers will go bankrupt or insolvent, and are not able to pay employee entitlements, such as redundancy pay. If this happens, you can sometimes get your redundancy pay through a government program called the Fair Entitlements Guarantee (FEG).

If you want to claim redundancy pay through FEG, you need to:

• make a FEG claim within 12 months of losing your job or within 12 months from the date of the liquidation or bankruptcy of your former employer.
• have lost your job due to the insolvency of your employer.
• be owed redundancy pay.
• be an Australian citizen or be allowed to work in Australia at the time that your employment ended.

You can find more information on the FEG website: https://www.dewr.gov.au/fair-entitlements-guarantee

Q&A: Minimum conditions of employment for WA employees

Q&A: Employment contracts for WA workers

Claim Guide: Unfair dismissal for national system employees

Claim Guide: Unfair dismissal for state system employees

Claim Guide: General protections for national system employees

Claim Guide: Protection of employee rights for state system employees

Q&A: Workplace discrimination for WA workers

Q&A: Contractor or employee for WA workers

Fair Work Ombudsman

Wageline

Fair Work Commission

Western Australian Industrial Relations Commission

Department of Employment and Workplace Relations (DEWR) – Fair Entitlements Guarantee (FEG)