Redundancy After 10 Years: Employer Pay, Notice and Legal Risks

Making a role redundant is one of the most difficult decisions you can make as a small business employer. It’s personal, it’s disruptive, and it can feel like you’re trying to balance the survival of the business with doing the right thing by your people.

But if you’re managing a redundancy after 10 years of service, the stakes are often higher. Long-serving employees usually have larger entitlements, stronger expectations around consultation, and (in some cases) a greater appetite to challenge the decision if the process feels unfair.

This article walks you through what you need to know as an Australian employer about redundancy after 10 years - including redundancy pay, notice requirements, practical steps to reduce risk, and the legal red flags that commonly lead to disputes. (This is general information only and not legal advice.)

What Does “Redundancy After 10 Years” Mean In Practice?

In Australia, a redundancy generally happens when you no longer need a person’s job to be performed by anyone. This is different from ending employment due to performance or misconduct. Redundancy is about the role, not the person.

For employers, “redundancy after 10 years” typically means the employee has completed a long period of continuous service, which can affect:

• redundancy pay entitlements (if applicable)
• how much notice you must give (or pay in lieu)
• what your modern award or enterprise agreement requires around consultation and redeployment
• the risk profile of the redundancy if your process isn’t airtight

It’s also a good moment to check whether anything else is triggered, like long service leave entitlements, any contractual termination benefits, and payroll/tax treatment of termination payments.

When Is A Redundancy “Genuine”?

A redundancy is more likely to be treated as a “genuine redundancy” (which can be important for unfair dismissal risk) when:

• the role is genuinely no longer required due to operational changes (e.g. restructure, downturn, technology change)
• you meet any consultation obligations under an award/enterprise agreement
• you consider redeployment options within your business (and, where relevant, associated entities)

If any of these steps are missed, the employee may argue the redundancy wasn’t genuine - and that’s where legal risk often increases.

Redundancy Pay After 10 Years: How Much Do You Owe?

Redundancy pay is one of the first questions employers ask - and for good reason. For a long-serving employee, redundancy pay can be significant and needs to be budgeted for properly.

Under the National Employment Standards (NES) in the Fair Work Act, redundancy pay generally depends on the employee’s length of continuous service. Importantly, the NES scale is not a straight line: it peaks at 10 years’ service and then reduces for longer service. There are also exceptions (for example, small business employers may have different obligations, and some roles or circumstances can be excluded).

Because these numbers matter and can change based on circumstances, it’s worth calculating carefully and documenting your workings (especially if the employee disputes the amount).

If you want a quick starting point before you finalise anything, our redundancy calculator can help you estimate redundancy pay in a practical way.

Check If You’re A Small Business Employer

One of the biggest “forks in the road” for redundancy pay is whether you are a small business employer (generally, fewer than 15 employees). This headcount test has specific rules about who counts (including regular and systematic casual employees), and it can also involve looking at associated entities in some situations. It’s not always as simple as checking your payroll list.

If you are a small business employer, redundancy pay under the NES may not apply - but that doesn’t mean you can skip a fair process or ignore notice and other entitlements.

Modern Awards And Enterprise Agreements Can Add Extra Requirements

Even where NES redundancy pay applies (or doesn’t), you also need to check whether a modern award or enterprise agreement creates extra obligations - especially around consultation and redeployment.

If you’re unsure which award applies, it’s often better to identify that first, then build the redundancy plan around it.

Notice Periods After 10 Years (And Paying In Lieu)

Separate from redundancy pay, you also need to provide the correct minimum notice of termination (or pay in lieu of notice). Notice is about how much warning the employee receives before their employment ends.

In many redundancy situations, employers choose to pay in lieu so the employee finishes up immediately (or after a short transition period), but you need to do that correctly and record it properly in the termination letter and final payslip.

From a compliance perspective, it’s helpful to treat notice as its own “line item” in your redundancy plan and ensure it matches:

• the NES notice minimums
• any award/enterprise agreement requirements
• the employee’s contract (if it provides more generous notice)

If you’re considering paying out notice rather than having the employee work it, our guide on payment in lieu of notice is a helpful way to sense-check the basics before you implement it.

Don’t Forget: Notice Is Different From Consultation

A common mistake is assuming that providing “notice” means you’ve met your “consultation” obligations.

They’re different concepts. Consultation usually needs to happen before you make a final decision, and it often involves:

• informing the employee (and potentially their representatives) of the proposed change
• giving them the chance to ask questions and provide feedback
• considering ways to reduce the impact (including redeployment)

Even if the outcome is ultimately the same, the consultation process can significantly reduce dispute risk and help preserve goodwill.

Process Matters: Consultation, Redeployment And Documentation

Most redundancy disputes aren’t really about the business needing to restructure - they’re about how the redundancy was handled.

When you’re dealing with redundancy after 10 years, your process should be especially careful. Long service often means the employee knows the business well, may have deep relationships with clients or staff, and may be more likely to scrutinise the decision.

Step 1: Clarify The Operational Reason (And Write It Down)

Before you speak to the employee, get clear internally on:

• what has changed in the business (financials, restructure, technology, reduced demand, outsourcing)
• why the role is no longer required
• what your future staffing structure will look like

It’s important that this is real, defensible, and consistent across your communications. If your “reason” shifts over time, that can create doubt about whether the redundancy was genuine.

Step 2: Run A Proper Consultation Process

Consultation is usually required under modern awards, and it’s good practice even where it’s not strictly mandatory.

For small businesses, this is one of the most practical ways to reduce legal and reputational risk. It also helps you spot alternatives you may have missed - like reassigning duties or rethinking timelines.

Step 3: Consider Redeployment Options Seriously

Redeployment isn’t just a “tick-the-box” step. You should genuinely consider whether there are other roles the employee could reasonably perform (with appropriate training where reasonable).

In practice, that means looking at:

• vacant roles now
• roles likely to become vacant soon
• part-time or altered duties arrangements (where workable)
• other locations (if you have multiple sites)

If redeployment isn’t possible, document why. A brief written record can be invaluable later.

Step 4: Use Clear, Consistent Paperwork

Your documentation should match the story and the legal obligations. In most cases, you’ll want a written record of:

• the business rationale (internal notes)
• consultation meetings (dates, attendees, key points discussed)
• redeployment considerations (what roles were reviewed and why not suitable)
• termination letter (with dates, entitlements summary, and next steps)

This is also where having the right legal foundations in place helps. For example, if you already have a well-drafted Employment Contract, it’s easier to align termination steps with your contractual terms and reduce confusion about notice, duties during notice, and final pay.

Final Pay Checklist: Leave, Long Service Leave And Other Entitlements

When you end employment due to redundancy, you’ll typically need to finalise and pay out accrued entitlements correctly. This is often where employers accidentally underpay (or overpay), especially for long-serving employees.

Annual Leave (Including Leave Loading If Applicable)

Accrued but unused annual leave is generally paid out on termination. Depending on the award or contract, you may also need to account for annual leave loading.

It’s worth reviewing your approach to annual leave on resignation as a general guide to annual leave payout concepts - then adjusting for redundancy-specific circumstances.

Long Service Leave (Often The Big One After 10+ Years)

After 10 years, long service leave is frequently the entitlement that surprises employers the most.

Long service leave is regulated by state and territory laws, and the rules vary across Australia (including how it accrues, when it becomes payable, and what happens on termination for redundancy).

If you operate in Queensland, it may also be useful to sense-check your calculations against how long service leave accrues in practice, including pro-rata long service leave rules.

Because long service leave can become a major cost at the 10-year mark, it’s a good idea to build it into your redundancy budgeting early - before you confirm the termination date.

Other Amounts You May Need To Pay

Depending on the employment arrangements, you may also need to consider:

• accrued time off in lieu (TOIL) or overtime entitlements
• commissions or bonuses (if they’ve been earned under the relevant rules)
• reimbursements for approved expenses
• superannuation (whether it applies can depend on the type of payment and current rules, so it’s worth getting payroll/accounting advice if you’re unsure)

The safest approach is to create a written final pay breakdown, have payroll review it, and keep it on file.

Legal Risks: When Redundancy After 10 Years Goes Wrong

Even when a business genuinely needs to restructure, redundancy can carry legal risk if it’s mishandled. For long-serving staff, those risks can feel amplified - not necessarily because the rules are completely different, but because the financial and emotional impact tends to be larger.

Unfair Dismissal Risk

If the employee challenges the termination, a key issue can be whether the redundancy was a genuine redundancy.

Common risk factors include:

• you didn’t comply with award/enterprise agreement consultation obligations
• the “redundant” role (or substantially the same duties) continues to exist
• you hire someone else soon after to do the same work under a different title
• you didn’t properly consider redeployment

When you plan the process carefully, you’re not just being compliant - you’re building a defensible record if a claim is made later.

General Protections (Adverse Action) Claims

Sometimes redundancy becomes legally risky if there’s an allegation that the “redundancy” was actually a cover for a prohibited reason - for example, because the employee exercised a workplace right, took sick leave, made a complaint, or was involved in a dispute.

These claims can be complex and time-sensitive. If any red flags exist (recent complaints, performance management, workplace injury issues), get advice before you communicate the final decision.

Discrimination And Other Workplace Claims

Redundancy decisions can also intersect with discrimination risks if the selection process isn’t objective - for example, if the redundancy disproportionately affects someone due to age, parental status, disability, pregnancy, or other protected attributes.

This is why it’s important to be clear on:

• why the role is redundant (not the person)
• how any selection decision was made (if multiple employees could be impacted)
• what objective criteria you relied on

Reputational And Culture Impacts

Even where you’ve done everything legally right, redundancies can affect morale and trust. A transparent process, respectful communication, and well-managed handover can go a long way - especially in small teams where everyone feels the impact.

If you’re restructuring more broadly, it can also help to ensure your internal policies and communications are consistent. Many businesses use a Staff Handbook to set expectations around workplace processes and reduce confusion when big changes happen.

Key Takeaways

• Redundancy after 10 years often involves higher entitlements (and the NES redundancy scale changes after 10 years), so it’s worth planning the process carefully before you act.
• Redundancy pay (where applicable) is separate from notice, and both must be calculated correctly with any award, agreement, and contract requirements in mind.
• Consultation and redeployment aren’t just formalities - they’re often the difference between a genuine redundancy and a dispute.
• Final pay can be more complex for long-serving employees, particularly with annual leave loading and long service leave rules (which vary by state and territory).
• Legal risk often arises when documentation is inconsistent, the role isn’t truly redundant, or the redundancy appears linked to complaints, leave, or other protected reasons.

If you’d like help managing a redundancy process (including redundancy after 10 years), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.