Everything You Need To Know About Redundancy (2025 Updated)

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Redundancy of staff can be a reality faced by businesses both big and small as they encounter changes in operations, structure or growth. The term “redundancy” describes a situation where an employer no longer requires an employee’s role to be filled in the business, or where the business becomes insolvent or bankrupt.

An employee’s role may become redundant as a result of a business utilising new technology or machinery, experiencing a downturn in sales or growth, relocating, or undergoing a business restructure.

Essentially, it is the job itself – not the employee – that becomes redundant.

What Is A Genuine Redundancy?

It is crucial that an employer ensures a redundancy is genuine, as failing to do so may lead a redundant employee to make an unfair dismissal claim against the business.

A redundancy is considered genuine when the role is no longer required and the employer has adhered to the relevant consultation requirements set out in the applicable award, enterprise agreement, or other registered agreement. For more detailed guidance on entitlements, refer to our Modern Award Analysis.

A redundancy is not genuine if the employer:

Still requires the role to be filled;
Has failed to consult with the employee about the redundancy, as mandated by the relevant award or registered agreement; or
Could have transferred the employee to another suitable position within the business.

Under all awards and registered agreements, employers must follow prescribed processes during significant business changes that may lead to redundancy. A particularly critical step is consulting with employees who will be affected by these changes – clearly outlining what the changes involve, how they may be impacted, and allowing them the opportunity to offer suggestions. Maintaining transparent communication is especially important in 2025, given the updated legislative guidelines.

Redundancy Pay And Entitlements

The Australian National Employment Standards set out the amount an employer must pay an employee if they are made redundant. Recent updates in 2025 have reaffirmed these guidelines.

Redundancy pay may be provided to an employee if:

A workplace instrument (e.g. an award or enterprise agreement) applicable to the employee contains redundancy pay entitlements; and
The employer employs 15 or more people, with the employee having worked for more than 12 months.

However, an employer is not required to provide redundancy pay if:

The employee has worked for the employer for less than 12 months;
The employer is classified as a small business;
The employee has engaged in serious misconduct;
The employee was employed on a casual basis;
The employee was hired for a specific role or for a finite period; or
An industry-specific redundancy scheme under a modern award applies to the employee’s industry.

An employee’s entitlement to redundancy pay may be reduced if the employer successfully transitions the employee into another suitable role or makes another employment arrangement.

How Much Redundancy Pay Is Payable?

Employees receive redundancy pay based on the length of their continuous service with an employer. This payment is calculated on their usual base rate, ensuring it fairly reflects their long-term contributions.

Period of Continuous Service	Redundancy Pay
Between 1 & 2 years	4 weeks
Between 2 & 3 years	6 weeks
Between 3 & 4 years	7 weeks
Between 4 & 5 years	8 weeks
Between 5 & 6 years	10 weeks
Between 6 & 7 years	11 weeks
Between 7 & 8 years	13 weeks
Between 8 & 9 years	14 weeks
Between 9 & 10 years	16 weeks
At least 10 years	16 weeks (maximum)

What To Do If You’ve Been Made Redundant

Being made redundant can be an extremely challenging experience in a person’s working life. You may face the loss of a role you valued, financial uncertainty, a dip in confidence, and the stress associated with finding new employment.

If you believe that your redundancy was not genuine or was handled unlawfully, seek advice immediately. Feel free to get in touch with us to obtain guidance on your rights. Alternatively, if you require assistance in managing a legal and sensitive redundancy process and preparing all the necessary documents, we’re here to help.

In 2025, both employers and employees are encouraged to stay abreast of the latest legal developments surrounding redundancy. Updated legislative changes emphasise the importance of transparency and robust consultation throughout the process. By engaging with expert resources such as our Modern Award Analysis and unfair dismissal guides, you can ensure that your approach to redundancy is fair and legally compliant. Maintaining detailed records and clear communication can help minimise disputes and facilitate a smoother transition during challenging times.

Adam Watters

Adam is a legal intern at Sprintlaw. He is currently completing his double degree in Law and Commerce at Macquarie University. With interests in contracts and accounting, he is looking to complete further study and gain experience in the area of commercial law.

Embeth Sadie

Embeth is a senior lawyer at Sprintlaw. Having previously practised at a commercial litigation firm, Embeth has a deep understanding of commercial law and how to identify the legal needs of businesses.