How do you calculate redundancy pay under the National Employment Standards when making a payment in lieu of notice if the employee’s work anniversary date – which would increase their entitlement – is to fall within the notice period?
Under the Fair Work Act 2009 (Cth), redundancy entitlement depends on the employee’s period of continuous service. An employee’s period of service ends on the date of termination, therefore the redundancy entitlement should be calculated by reference to the actual date of termination. However, employers should be wary of paying an employee in lieu of notice if this is done for the purpose of avoiding redundancy payment obligations. You may wish to consider raising the situation with the employee to avoid a future dispute.