Question:
An employee that has handed in their resignation and I am after some advice as to whether they are entitled to a redundancy payment on termination.
They are employed under the Building & Construction General Onsite Award 2010 and is currently employed as a trainee surveyor. When they first started with the company they were employed as a Civil Construction Trainee Cert III. After completing this, rolled into a Civil Construction Trainee Cert IV before rolling into their current position as a Trainee Surveyor.
From what I can see under the Award clause 40 notes that an exception applies to those identified under Sections 123(1) and 123(3) of the Fair Work Act 2009. Section 123(1) d – an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period or is, for any reason, limited to the duration of the training arrangement.
Based on this, will we need to pay redundancy?
Answer
Yes, you will have to pay redundancy.
The Building and Construction General On-site Award 2010 contains an industry-specific redundancy clause that is unique to the building and construction industry.
The Award defines ‘redundancy’ as a situation where an employee ceases to be employed by an employer to whom this award applies, other than for reasons of misconduct or refusal of duty.
The redundancy provision is triggered where either of the following occurs:
- A construction employee is made redundant by their employer.
- An employee resigns after having been employed for 12 months or more.
Where an award has an industry-specific redundancy provision, the redundancy pay provisions of the Fair Work Act 2009 do not apply.
Unlike the provisions of the Fair Work Act 2009, the Building and Construction General On-site Award 2010 does not contain an exemption for small business employers. The employee at clause 41 of the award is entitled to a redundancy if you do not pay into a scheme.
The table below should assist in working out the payment.
Redundancy Pay
(a) A redundant employee will receive redundancy/severance payments, calculated as follows, in respect of all continuous service with the employer:
| Period of continuous service with an employer | Redundancy/severance pay |
| 1 year or more but less than 2 years | 2.4 weeks’ pay plus for all service in excess of 1 year, 1.75 hours pay per completed week of service up to a maximum of 4.8 weeks’ pay |
| 2 years or more but less than 3 years | 4.8 weeks’ pay plus, for all service in excess of 2 years, 1.6 hours pay per completed week of service up to a maximum of 7 weeks’ pay |
| 3 years or more than but less than 4 years | 7 weeks’ pay plus, for all service in excess of 3 years, 0.73 hours pay per completed week of service up to a maximum of 8 weeks’ pay |
| 4 years or more | 8 weeks’ pay |