Redundancy determination

Redundancy determination is a legal process where the Fair Work Commission reviews and possibly reduces the redundancy payment an employer owes to an employee. This decision is based on whether the employer has obtained other acceptable employment for the employee or cannot afford to pay the full amount. It's a measure to balance the financial burden on employers while still providing fair compensation to redundant employees.

When an employer can apply

Under section 120 of the Fair Work Act, an employer can apply to the Fair Work Commission to reduce redundancy pay, even to nil, if it has obtained other acceptable employment for the employee or cannot pay the amount. Acceptable employment is usually work on similar terms, in a similar role and location. The employer must apply and wait for the decision; it cannot simply pay less. For example, if you arrange a comparable job for a redundant employee with a client business at the same pay, you may apply to have their redundancy pay reduced.

Read our guide to redundancy pay, or call our HR advice line.