Redundancy process for employers: a step-by-step checklist
By Stefan Savva, Founder · Checked against the Fair Work Ombudsman and the Fair Work Commission on 28 October 2026 · 6 min read
A redundancy in Australia runs in a set order: check the job is genuinely no longer needed, read your award or agreement, consult the people affected, look for other work for them in the business, choose who is affected and why, tell Services Australia if 15 or more are going, give written notice, then pay everything owed. Skip a step and the redundancy may not be genuine, which opens the door to an unfair dismissal claim. This checklist takes each step in order and links to the official source for each rule.
It is written for the HR manager or business owner doing this for the first time. It is general information, not legal advice. If your situation is unusual, ask the Fair Work Ombudsman (13 13 94) or an employment lawyer before you act.
Step 1: Check the job is no longer needed
A redundancy is about the job, not the person. Under section 389 of the Fair Work Act 2009, it is a genuine redundancy when you no longer need anyone to do the job because of a change in how the business operates. Common reasons are new technology, lower sales, a closure, a move, or a restructure after a merger.
Write down the business reason now, in plain words. If someone will be hired to do the same job next month, it is not a redundancy. Our guide to genuine redundancy covers the three tests in detail.
Step 2: Find your consultation duty
Most awards and enterprise agreements have a consultation clause. It applies once you have made a definite decision to make major changes that are likely to have significant effects on staff. Find the award or agreement that covers each affected person and read that clause before you talk to anyone.
If you skip a consultation duty that applies, the redundancy is not genuine, even if the job really has gone. The Fair Work Commission puts consultation beside the job test as one of the two things a genuine redundancy needs.
Step 3: Consult the people affected
Consultation means more than telling people the outcome. The Fair Work Ombudsman says that after deciding on major changes you must:
- tell the affected staff promptly
- explain the changes and the effects they are likely to have
- discuss ways to reduce those effects
- genuinely consider what staff say
Keep notes of every meeting: who was there, what was said and what you changed as a result. Our guide to redundancy consultation explains what counts and how to record it.
Step 4: Look for other work in the business
A redundancy is not genuine if it would have been reasonable to move the person into another job, in your business or in an associated entity (a related company). Look at open roles, roles opening soon and roles the person could do with a little training. Record what you looked at and why each option did or did not suit.
Step 5: Choose who is affected, fairly
If you are cutting some roles in a team but not all, decide how you will choose before you choose. Use criteria you can explain, such as skills the business still needs, and apply them the same way to everyone. Never base the choice on age, sex, pregnancy, disability, carer duties, union membership or a recent complaint. Those are protected reasons, and choosing on them is unlawful whatever you call the dismissal.
Step 6: Notify Services Australia if 15 or more
If you are thinking about making 15 or more people redundant, you must tell Services Australia in writing before the dismissals happen. The notice gives the reasons, how many people and which kinds of roles are affected, and when it will happen. Section 531 of the Fair Work Act also requires you to notify and consult any union that represents affected staff. Services Australia publishes a template letter.
Step 7: Give written notice
Tell each person in a private meeting, then give them a letter the same day. The National Employment Standards set a minimum notice period based on continuous service, set out in the Fair Work Ombudsman's notice and redundancy pay fact sheet:
| Continuous service | Minimum notice |
|---|---|
| 1 year or less | 1 week |
| More than 1 year to 3 years | 2 weeks |
| More than 3 years to 5 years | 3 weeks |
| More than 5 years | 4 weeks |
Add one week for anyone over 45 with at least 2 years of service. Our guide to redundancy notice and pay in lieu of notice covers both in more detail. You can pay the notice period instead of having the person work it, at their full rate of pay, including the bonuses, loadings, allowances and penalty rates they would have earned.
Step 8: Work out redundancy pay
Redundancy pay is separate from notice. It is paid at the person's base rate for ordinary hours, on the National Employment Standards scale in the fact sheet. It peaks at 16 weeks for 9 to 10 years of service, then drops to 12 weeks from 10 years.
| Continuous service | Redundancy pay |
|---|---|
| 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 |
Most employers with fewer than 15 employees do not have to pay it, and neither do most casuals or people with less than 12 months of service. An award or agreement can give more. Our guide to redundancy in a small business explains how to count your staff.
Step 9: The final pay
On or before the final pay date, pay:
- outstanding wages, including penalty rates and allowances
- unused annual leave, and leave loading where it applies
- long service leave where it applies
- notice, or pay instead of notice
- redundancy pay where it applies
Sick and carer's leave is not paid out. Your award or agreement may set when final pay is due. Where nothing does, the Fair Work Ombudsman recommends paying on the last day or the next scheduled pay day.
Step 10: Look after the person on the way out
None of this is required, but it changes how the day lands for the person leaving and for the people who stay. Give them time off to look for work during notice. Offer a reference. Tell the team yourself, before rumour does. And consider outplacement, so the person has help with what comes next.
Changing Careers gives each person you nominate twelve weeks of help with their next role for A$599 per person. Our guide to what outplacement costs compares the options.
Common questions
What is the first step in a redundancy process?
The first step in a redundancy process is to confirm the job itself is no longer needed because of a change in how the business operates, and to write that business reason down in plain words before you consult anyone.
How much notice must an employer give for a redundancy?
Under the National Employment Standards, minimum notice runs from 1 week for 1 year of service or less to 4 weeks for more than 5 years, plus 1 week for an employee over 45 with at least 2 years of service.
Can an employer pay instead of notice?
An employer can pay the notice period instead of having the person work it, at their full rate of pay, including the bonuses, loadings, allowances and penalty rates they would have earned.
When must an employer tell Services Australia about redundancies?
An employer thinking about making 15 or more people redundant must tell Services Australia in writing before the dismissals happen, giving the reasons, the number and kinds of roles affected, and the timing.
Is sick leave paid out in a redundancy?
Sick and carer's leave is not paid out when employment ends. Final pay covers outstanding wages, unused annual leave and loading where it applies, long service leave where it applies, notice and any redundancy pay.
Sources
General information, not legal advice.