The decision usually arrives with a restructure memo, a closed branch, or a new software rollout: a role is disappearing and someone has to go. Or it arrives differently, with missed targets, a conduct breach, or a medical certificate that changes everything. Either way, employment is about to end, and the first call you make is not about the letter you will send. It is about which legal pathway you are actually on, because under the Fair Work Act 2009 (Cth) (the Act) the classification is decided by the facts of your situation, not by the label you choose.
Two ways employment ends, one decision to make first
A genuine redundancy is about the job. It occurs where the employer no longer requires the job to be performed by anyone, because of changes in the operational requirements of the enterprise, such as restructuring, automation, outsourcing, closing a location or a significant downturn in work. Termination for other reasons is about the person. The role still needs to be done, but the employee is being dismissed for performance, conduct, capacity, or because a fixed-term arrangement has run its course.
The two pathways share a destination but little else. Redundancy carries its own obligations around consultation and redeployment, and it can trigger redundancy pay. Termination carries obligations around valid reason and procedural fairness, and it can trigger unfair dismissal remedies. The mistake that costs businesses most is assuming the label controls the outcome. Calling a performance dismissal a redundancy does not make the job disappear, and a person whose role has genuinely vanished cannot be kept out of a redundancy by describing their exit as something else. The statutory tests look at what happened in fact, so the classification question comes first.
The factors that decide the call
Work through the following factors before you commit to a pathway. They track the definition of genuine redundancy in s 389 of the Act, the payment rules in ss 119 to 123, and the unfair dismissal framework in ss 385 to 388.
Is the job really gone?
This is the threshold question. Under s 389(1)(a) of the Act, a dismissal is only a genuine redundancy where the employer no longer requires the person's job to be performed by anyone because of changes in the operational requirements of the enterprise. Note the wording: the job must be gone, not just the person.
Test your situation against these questions:
- Will anyone do this work after the change? If the duties will be performed by someone else, including a new hire or a contractor, the job has not disappeared.
- Is the work being redistributed in substance? If the core tasks are simply divided among the remaining team, the role may still exist.
- Is the change real and documented? A restructure that exists only in conversation is hard to defend. Budgets, board minutes and organisational charts help show the operational requirement.
- Is this ordinary turnover? Redundancy pay under s 119(1)(a) does not apply where the termination is due to the ordinary and customary turnover of labour, which is a separate factual inquiry again.
If the work survives in any recognisable form, you are looking at a person-based termination, not a redundancy.
Whose consultation obligations apply?
A dismissal is not a genuine redundancy if the employer has failed to comply with any obligation in a modern award or enterprise agreement to consult about the redundancy. That requirement sits in s 389(1)(b) of the Act, and it is a common reason otherwise sound redundancies fail. Where the award or agreement imposes a consultation obligation, work through these steps:
- Check coverage first: Does a modern award or enterprise agreement cover the employee? If not, there is no award or agreement consultation obligation feeding into s 389(1)(b), though consultation remains good practice.
- Find the clause: Most awards contain a consultation provision dealing with major workplace change, setting out the information you must give and the timing.
- Consult before deciding, not after: Share the proposed change, its reasons, the likely effects and the employees likely to be affected, and invite the employee or their representative to give their views about measures to avoid or reduce the effects.
- Consider the responses genuinely: If a reasonable alternative is proposed, assess it on its merits and respond. A box-ticking email chain is not consultation.
Is there a reasonable redeployment option?
Under s 389(2) of the Act, a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise or the enterprise of an associated entity. This is a substantive search, not a courtesy.
The comparison looks like this:
- Option A, a suitable role exists: The employee is redeployed, the redundancy pathway ends, and no redundancy pay is owed because the employment continues.
- Option B, no suitable role exists: The redundancy proceeds, subject to consultation and the payment obligations below.
Two further rules shape this factor. Under s 120 of the Act, an employer can apply to the Fair Work Commission to reduce redundancy pay where it has obtained other acceptable employment for the employee or genuinely cannot pay the amount. And under s 122(3), an employee who refuses employment in the circumstances described in that section may lose the entitlement to redundancy pay. Consider location, pay, seniority and the employee's skills when working out what is reasonable, and keep a record of every role considered and why it did not fit.
What does each pathway cost?
The entitlements that attach to each pathway are a major part of the decision, and they are not identical.
On a genuine redundancy, an eligible employee is entitled to redundancy pay under s 119 of the Act, at the base rate of pay for ordinary hours, according to continuous service:
- At least 1 year but less than 2 years: 4 weeks
- At least 2 years but less than 3 years: 6 weeks
- At least 3 years but less than 4 years: 7 weeks
- At least 4 years but less than 5 years: 8 weeks
- At least 5 years but less than 6 years: 10 weeks
- At least 6 years but less than 7 years: 11 weeks
- At least 7 years but less than 8 years: 13 weeks
- At least 8 years but less than 9 years: 14 weeks
- At least 9 years but less than 10 years: 16 weeks
- At least 10 years: 12 weeks
The Fair Work Ombudsman publishes the same scale, and a modern award or enterprise agreement can set different, sometimes higher, entitlements, so check the applicable instrument as well as the Act.
Redundancy pay is not owed in a range of situations. Under s 121 of the Act, it does not apply where the employee has less than 12 months of continuous service (excluding casual periods) or where the employer is a small business employer, meaning one employing fewer than 15 employees, counting regular casuals and treating associated entities as one. Under s 123, the notice and redundancy provisions do not apply to casual employees, employees engaged for a specified period, task or season, trainees in certain arrangements, or employees dismissed for serious misconduct.
On either pathway, the employer must give the minimum notice under s 117 of the Act, or pay in lieu: one week for up to one year of service, two weeks for one to three years, three weeks for three to five years, and four weeks beyond five years, increased by one week where the employee is over 45 and has at least two years of service. Accrued but unused annual leave must be paid out on termination in either case.
How exposed are you to an unfair dismissal claim?
Under s 385 of the Act, a dismissal is unfair where the person was dismissed, the dismissal was harsh, unjust or unreasonable, it was not consistent with the Small Business Fair Dismissal Code, and it was not a case of genuine redundancy. A genuine redundancy is therefore a complete defence to an unfair dismissal application, which is one of the main reasons employers want the classification to hold.
Where the redundancy defence is not available, the pathway shifts to the fairness inquiry in s 387 of the Act. The Commission weighs whether there was a valid reason related to capacity or conduct, whether the employee was notified of that reason and given an opportunity to respond, whether a support person was unreasonably refused, whether warnings were given in performance cases, and the size of the enterprise and its HR resources. In other words, the person-based pathway is won or lost on process.
Two small business rules matter here. An employee must have completed the minimum employment period to be protected from unfair dismissal at all: six months for most employers, or 12 months where the employer is a small business employer, per s 383 of the Act. And a small business employer that complies with the Small Business Fair Dismissal Code, reflected in s 388 of the Act, has a separate defence against an unfair dismissal application.
How an Artificer Legal employment lawyer helps you make and act on the call
The classification decision rewards a dispassionate review, and that is where a practitioner earns their fee. An Artificer Legal employment lawyer will stress-test the assumption that sits underneath everything, that the work is genuinely gone, by reviewing the organisational chart, the duties being redistributed and the documentation of the operational change. Where the pathway is a genuine redundancy, they will map the consultation clause in the applicable award or agreement, plan the redeployment search and the records that go with it, and calculate entitlements under the National Employment Standards and any industrial instrument. Where the pathway is a person-based termination, they will pressure-test the valid reason, the evidence behind it and the fairness of the process, including the Small Business Fair Dismissal Code where it applies.
They will also draft the documents each pathway needs, consultation letters, redundancy letters, termination letters, and finalise the payment calculations, so the paperwork matches the pathway you have chosen. And if an application is filed with the Fair Work Commission, they can manage the response and the conciliation, rather than leaving you to reconstruct months of process decisions after the fact.
The facts decide the pathway, so gather them first
The question that takes the most effort, and the one people most often skip, is the factual one: is the work still there, and who could reasonably do it? Answer that in writing before you settle on a label, because everything else follows from it. If the work is gone, you have consultation, redeployment and payment obligations to discharge, and getting them right defeats the unfair dismissal claim. If the work remains, you have a person-based dismissal, and the fight is about valid reason and fair process. Either way, the pathway is fixed by the facts, and a lawyer's early review of those facts is cheaper than defending the wrong classification later.
To summarise: a genuine redundancy ends a job, while a termination ends a person's employment in a role that still exists. To hold the redundancy classification you must show the job is no longer required, you must have complied with any award or agreement consultation obligations, and you must have considered reasonable redeployment within the business and its associated entities. If those elements hold, no redundancy pay is owed only in the excluded cases, such as service under 12 months, small business employers, casuals and fixed-term arrangements, and the dismissal is protected from unfair dismissal challenge. If they do not hold, you are running a termination for another reason, where valid reason, notice and procedural fairness decide the outcome. The label is your last step, not your first.<｜end▁of▁thinking｜>
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