Common Mistakes to Avoid When Calculating Redundancy Payments in WA

In business, a time may come when the employer won’t need an employee’s services for a particular function. For example, after companies started to use barcodes and scanners to keep inventory – the bookkeepers became out of a job or redundant. Incidentally, employee redundancy is an important matter for both employers and employees. So, whether you are a concern looking to reduce its budget or a recently laid off worker – it is always best to consult an expert for redundancy legal advice in Perth.

It is ethical and important to understand the rights, processes, and entitlements associated with redundancy to ensure a lawful and fair transition.

What is redundancy?

In companies where downsizing, business restructuring, or new technologies are adopted – an employee’s position’s usefulness may end. This occurrence is called redundancy, and Australian Legal structures direct payments if an employee is let go due to redundancy. Although painful for both the employee and the owner, redundancy often becomes essential in the workplace due to changes in market demand, economic factors, and administrative reformation.

What is genuine redundancy?

In Australian employment scenes, a genuine redundancy will take place if the employee’s job terminates from existence and the workers have conformed to specific legal necessities. According to the best employment lawyers in Perth, the redundancy has to fulfill certain conditions. For example, the company cannot hire a replacement for the same job and has made a justified attempt to post the worker within the organization.

According to the Fair Work Act 2009, Section 389, a genuine redundancy (and related dismissal of a person) will be defined as follows:

1. If the employer has adhered to any obligation in a modern enterprise agreement (applying to the employment) to look up the redundancy, it will be considered a genuine redundancy.
2.  The person’s (who has been let go) jobs are no longer required by the employer because of changes in the functional environment of the employer’s enterprise.

It is always best to hire the most experienced legal agency to have expert legal assistance while discussing the appropriate redundancy pay WA for the discharged employee.

The law regarding redundancy

The National Employment Standards (NES) clearly state the process of redundancy. The business owners must mandatorily give the employees a minimum notice period before ending their employment.

Every employee coming under the control of Commonwealth workplace laws has the right to receive severance payments. However, their redundancy entitlements can be a maximum of 12 weeks’ pay – provided they have met the following conditions:

• The company has a workforce of 15 or more employees.
• The worker has completed at least 12 months of constant service.

You must take the help of an expert employment lawyer in Perth if any issue occurs while disbursing redundancy pay.

The common mistakes to evade

The employees getting dismissed due to redundancy can apply in other capacities or businesses. Redundancy only occurs when the owner doesn’t need the worker’s function anymore. It can happen during a business restructuring, in bankruptcy cases, and in situations where a new owner has bought a business and the old employees refuse to work under new management. The dismissal doesn’t concern the worker’s performance or skill level.

Likewise, the owner can commit some common mistakes while calculating redundancy payments. Here are they:

• The employers must keep notice and severance payments separate. Notice means the time the employee can use to find other employment. At the same time, severance payment is given as compensation for the future privilege loss due to the accumulated sick leave and extended service leave.
• The redundancy payment amount depends on their continuous service duration and their base rate of pay. The basic formula for calculating redundancy pay requires multiplying the base pay rate and the redundancy pay time. A mistake in any of these factors will give rise to a wrong payment.
• The base pay will only include the rate the employee gets for their normal working hours. They shouldn’t add bonuses, loadings, fiscal grants, incentive-based payments, overtime, or penalty rates.
• Casual employees and workers contracted for a particular period, task, and season length and workers sacked for serious bad behaviour are not eligible for redundancy pay. You should check thoroughly before calculating an employee’s redundancy payment.

In conclusion

Employers must consider the above facts when they are calculating an employee’s redundancy payment. However, employing the most recommended employment lawyer Perth will ensure a smooth and mistake-free transaction.