For employees in the WA state industrial relations system, a redundancy occurs when an employer terminates an employee due to circumstances that are not related to the employee’s conduct or job performance.
It is a redundancy if:
- an employer decides they no longer want an employee’s job to be done by anyone; or
- an employee is transferred to a lower paid job because their current job no longer exists.
It is not a redundancy if:
- the employee is dismissed and replaced with another employee; or
- there has been a transfer of business from one employer to another and an employee continues to be employed in the same job with the new employer.
When an employee is made redundant, an employer must:
- provide the correct notice period or pay in lieu of notice;
- pay out any unpaid wages;
- pay out unpaid annual leave;
- if the employee has had 7 or more years continuous employment, pay out accrued and/or pro rata long service leave; and
- provide paid leave for job interviews during the notice period.
An employer may be required to provide a redundancy or severance payment, depending on the provisions of the relevant WA award and whether the employer has 15 or more employees. The Redundancy payments section below has details.
An employer may also be required to notify of proposed redundancies.
The employer must notify the employee in writing and consult with all employees who may be affected by the redundancy decision. This includes providing information and holding discussions
- on the reasons for the proposed terminations;
- likely effects on employees; and
- the measures that may be taken to avoid or minimise adverse effects on the employees concerned.
If an employee nominates a union to represent them, that union must also be notified and consulted.
Redundancy / severance payments
Show moreAn employer is required to provide a redundancy or severance payment to an employee if:
- the employer has 15 or more employees (including casual and part time employees); or
- the relevant WA or industrial agreement requires severance payments to be made to redundant employees regardless of the number of employees.
If an employer has 15 or more employees and it is covered is by a WA award or industrial agreement that requires severance payments, the employer is entitled to whichever is the higher severance payment entitlement.
If the employee resigns during the notice period, they are entitled to the same severance pay they would receive if they had worked until the end of the notice period.
Severance requirements – businesses with 15 or more employees
Employers in the WA state industrial relations system with 15 or more employees (including casual and part time employees) must provide employees who are made redundant with the number of weeks’ severance pay outlined in the table below, unless the employee is an excluded employee.
Excluded employees to whom employers are not required to provide severance pay are:
- employees with less than one year’s service
- probationary employees
- apprentices and trainees
- casual and contract employees
- employees terminated due to serious misconduct or for other reasons not related to redundancy.
These are the minimum severance payments, and override any lower amount specified in a WA award. If a WA award specifies a higher severance payment, the WA award entitlement must be provided to the employee.
The payment of redundancy pay is based on ordinary time earnings. Ordinary time earnings excludes overtime, penalty rates, disability allowances, shift allowances, special rates, fares and travelling time allowances, and bonuses.
| Employee’s period of continuous service* | Number of weeks’ severance pay |
|---|---|
| Less than 1 year | Nil |
| 1 year and less than 2 years | 4 weeks |
| 2 years and less than 3 years | 6 weeks |
| 3 years and less than 4 years | 7 weeks |
| 4 years and less than 5 years | 8 weeks |
| 5 years and less than 6 years | 10 weeks |
| 6 years and less than 7 years | 11 weeks |
| 7 years and less than 8 years | 13 weeks |
| 8 years and less than 9 years | 14 weeks |
| 9 years and less than 10 years | 16 weeks |
| 10 years and over | 12 weeks |
* An employee’s period of continuous service includes any service with that business under a previous employer where there has been a transfer of business. A transfer of business can occur when one employer sells a business (or part of a business) to another employer, and may also occur in other ways, including by succession or assignment.
Employers can apply to the to have the severance payment varied if they:
- do not have the capacity to pay; or
- find acceptable alternative employment for the employee.
WA award severance pay requirements
Some WA awards have specific severance pay requirements that apply to all employers regardless of the number of employees.
An employer with less than 15 employees who is covered by an WA award that does not exclude businesses with less than 15 employees from making severance payments must provide redundant employees with the severance payment in the relevant WA award.
View the WA award summaries or consult the relevant award on the for details on award severance payments.
