Fixed term contract employees are employed for a specific period of time or task. Their employment ends when the period of time has been reached, or the task has been completed. However, what happens if the employee expects to finish the work earlier than the contract had intended? Are they entitled to redundancy pay?

 

Under the National Employment Standards, an employee is entitled to redundancy pay if:

  • The position becomes redundant before the end of the period of time specified in the contract of employment,
  • The employee has completed at least 12 months’ continuous service with the employer, and;
  • The employer employers 15 employees or more.

 

Under the scale of redundancy pay, an employee who has completed more than one year but less than two years’ continuous service is entitled to four weeks’ redundancy pay at the employee’s base rate of pay.

 

The bottom line: Redundancy pay is not required where the termination occurs on the completion date of the contract of employment (either for a specified task or specified time)

An employee who is terminated at any other time during the course of a contract would be entitled to redundancy pay provided the employer employs 15 employees or more and the employee has completed at least 12 months’ continuous service with the employer.

 

For advice regarding fixed contracts and redundancy pay, please contact us on (08) 9316 9896 or enquiries@processworx.com.au.

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