Redundancy – Is it or isn’t it?

A case recently brought before the courts by the Fair Work Ombudsman has shed light on whether employees are entitled to a redundancy payment if a business loses a contract for services that the workforce is engaged to fulfil.

The case involving Spotless Cleaning Services found that when a business loses a contract, or the contract is not renewed, and workforce is let go as a result this is not considered to be ordinary and customary turnover of labour. Instead, it is a genuine redundancy and consequently employees who meet the eligibility criteria under the Fair Work Act must receive full redundancy entitlements.

This is important to keep in mind if you are a business that engages workforce specifically to fulfil the terms of service agreements that you have with your clients and customers.

If you’re an employer who is re-structuring or downsizing and need help with the redundancy process get in touch via the contact form or by email


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