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March 14, 2018

We have an employee who has been working with us for 14 months. We would like to make them redundant due to poor performance. Under the NES, do we need to make a redundancy payment?

You cannot retrench an employee due to poor performance. However, once you identify that your business requires positions to be made redundant, and if the employee you speak of is employed as a worker in the position you intend to make redundant, you may identify that person to be selected.

You would be required to comply with the necessary redundancy/consultation provisions of any award or agreement governing the employee’s employment. If you follow these procedures and decide to terminate for redundancy, an employee with 14 months’ service is entitled to 4 weeks of severance pay plus payment for notice and any accrued annual leave.

If you are a small business employer (i.e. if you and any associated entities employ fewer than 15 people), you are not obliged to make redundancy payments under the FW Act.


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