Redundancy can be a time for celebration – or stress.
A redundancy that is taken voluntary can be a timely opportunity for an employee to either pause or take their career in a new direction. However, a forced redundancy can be a difficult time for individuals and companies alike, as it often comes with significant changes in both financial and emotional terms.
Receiving redundancy pay will always be a unique experience and so should your consultation process. So whatever reality receiving a redundancy payout means for you, it’s important to have a clear understanding of how your redundancy and entitlements should be handled – and how to protect your finances and plan for this next chapter in your life.
In this article, we look at what you can expect from the different stages of the redundancy process, and how trusted and expert financial advice and planning can help you progress with a sense of security and confidence.
The redundancy process > final payments and any registered agreement
Criteria for redundancy to take place
The need for a consultation meeting > first, second and final consultation meeting
It is essential for a thorough consultation process to take place when redundancies or proposed changes happen, in order to ensure that all parties involved are adequately informed and treated fairly.
Redundancy not only affects the employee’s employment status but can have a considerable impact on the entire organisation. As such, communication and consultation between all relevant parties should be encouraged so that appropriate levels of transparency and consideration can take place.
At the end of the consultation, employers should provide a reasonable period of time and communicate clearly with all remaining employees regarding any pay for redundancy, whether that be during the first meeting or on the second consultation meeting.
We cannot stress how important this is for redundant employees. Take for instance, the case that a company files for insolvency, that would mean you are entitled to receive final payments such as unused annual leave and long service leave, on top of the redundancy payment and other payments due to the Fair Entitlements Guarantee (FEG).
Who is eligible for redundancy pay?
Not every terminated employee is eligible for redundancy payments. Those who are eligible must meet certain criteria, and one example from the criteria would be that an employee should have worked at an organisation for a minimum of a year and holds a permanent position in that organisation.
If you have been made redundant and would like to know whether or not you qualify for redundancy pay, you can schedule a session with us and we’ll help guide you on this aspect.
A redundancy plan with Tribeca Financial
At Tribeca Financial, we understand that redundancy can be an extremely difficult time both financially and emotionally. That’s why we provide a dedicated plan to help individuals in these times of need. Our team of financial advisors have experience working with both individuals and organisations to ensure that they are supported through the process from start to finish.
This is where an advice firm such as Tribeca can play such an important role. To reassure people in this situation that you’ll be OK financially. That we’ve got your back. Our Tribeca Financial advice experts will work closely with you to assist in minimising tax implications of major changes and sourcing any applicable government benefits for example.
By mapping out your life and career goals in an in-depth process, our redundancy payout specialists take the time to understand your current financial situation, as well as the impact your redundancy will have. We then provide you with a strategic financial roadmap.
When you are in control of your finances, you are set up for the best possible opportunities for success – and that helps you enjoy your redundancy package and make the most of your payout.
So let’s take a look at how Tribeca’s redundancy consultation process is designed to create positive and empowering outcomes.
Getting through the redundancy process together
Whether you’re going through a voluntary or forced redundancy, it can be a confronting and confusing time. Suddenly you go from full time work to having a lot of time on your hands, without really knowing what to do next.
The natural reaction is to feel that you need to find the next job quickly. But the reality is it’s likely that you have plenty of time to consider your next move. A redundancy is often enough to have a good three, six or nine months to pay bills, mortgage repayments, and really take some time to work out the next career and lifestyle move.
This is where an advice firm such as Tribeca can play such an important role. To reassure you that you’ll be OK financially. That we’ve got your back. And we’ll work with you to map out a plan to move forward.
Our redundancy consultation begins with a discussion about your current financial situation. We’ll also talk to you about what options you have available to you during this time and provide advice on how to best manage your finances.
Our consultation for redundancy includes:
The value of trusted professional advice
At Tribeca Financial, we understand it can be difficult to talk about something as personal as redundancy. That’s why we create an open and supportive environment for our clients. We want you to feel comfortable discussing your financial situation so that together we can find the best solution for your needs.
By providing this trusted support, it means that our advisors can challenge you with some important questions.
Questions like: What do you really want to do? What lights your fire; that sparks your interest. What makes you happy?
These questions can be tough because they can be life-defining. Of course you might want to stay in your chosen career. But your answers could also place you in a totally different professional pathway with all the ramifications that come with that. That can be daunting.
But knowing this, our advisors can look at all the financial scenarios and models to determine what might a new career look like. Does anything need to be adjusted? And what effect will that have on your short, medium and long-term goals.
These discussions are critical in helping us shape a plan that can empower you to take control of your financial future and live your Good Life.
Frequently Asked Questions
As noted in the National Employment Standards (NES), the following are considered to be the adequate notice period:
- Redundant employees who have worked for a full year or less than that have a 1 week notice period.
- Redundant employees who have worked for over 1 full year but less than 3 years have a 2-week notice period.
- Redundant employees who have worked for over 3 full years but less than 5 years have a 3-week notice period.
- Redundant employees who have worked for over 5 full years have a 4-week notice period.
Do note that individuals who are 45 years old and over should have completed a minimum of 2 working years in order to be eligible for an extra week’s notice upon receiving the initial notice.
A voluntary redundancy is when an employee agrees or volunteers to leave their current role and in return, is offered a redundancy payment. This can be beneficial for an employer’s business when they have excess manpower and need to reduce the overall number of employees working for the company, as it allows them to avoid making the difficult decision of forcing employees out.
A genuine redundancy occurs when an employee’s job is deemed no longer necessary and their employment is terminated. In this situation, the employer must follow any consultation requirements outlined in the award, enterprise agreement or other registered agreement. A redundancy payment is then often given to the employee as a form of severance.
Yes, redundancy pay and severance pay are the same.
This actually depends to some extent and we’d be happy to discuss whether your severance pay is subject to certain tax rules.
We want to make sure that you get the most out of your appointment with us, so please ensure you have access to:
- Drivers Licence
- Bank statement
Your advisor will let you know if there’s anything else you need to bring along to your appointment.