'Bona fide' is a
Latin term which means 'genuine' or 'without fraud or
deceit'. TheFair Work Actdoesn't actually use the term, and
instead talks about redundancy in terms of whether it is genuine or
not - the same thing, but in English.
A genuine redundancy is when someone's employment is terminated
because the employer "no longer requires their job to be performed
by anyone" and must be because of "changes in the operational
requirements". An employer must also have consulted with
employees if required to by an agreement or award.
This may happen, for example, if your employer closes a branch
or division, or when there is a restructure or reallocation of
work. A redundancy is a lot less likely to be genuine if
someone is hired to take a similar job with a different title and
lower pay, or if there were other opportunities for you available
within the company, such as being transferred to a similar role in
National Employment Standards
The National Employment Standardsset out minimum entitlements
for when someone is made redundant. You must have worked there
for one year before being entitled to redundancy pay. For
that one year, you are entitled to four weeks pay. The
entitlements range from 4 weeks up to 16 weeks pay for 9 years of
service. You are also entitled to be paid for whatever annual
leave you have not used and, depending on how long you've been
there, long service leave. You are also entitled to notice,
or payment in lieu of notice, in line with how long you've worked
If you are covered by an award or agreement, or if your contract
says otherwise, this may be different. There are also
exceptions, such as for small businesses with less than 15 full
time employees, in some cases involving a transfer of employment,
if you have a fixed-term contract, or if you are a casual
If you are told you are being made redundant and you are unsure
in any way about whether it is genuine or if you are being paid
correctly, seek legal advice. You might be able to lodge an
unfair dismissal application, or negotiate a fairer outcome.
You may also want to seek financial advice, especially given
the tax implications of a 'bona fide' redundancy payment (a place
where the Latin term still survives!). You can also claim
unpaid redundancy entitlements for up to 6 years after your
employment ended by lodging an underpayment claim.
Even if your redundancy is 'bona fide' and you are happy with
your package, it is still a time which may be very stressful and
uncertain. We strongly recommend you seek suitable advice to ensure
you get the entitlements you deserve.
If you'd like some more information on this topic or
clarification of what we've written, why not get in touch directly
with our blog writer, Sorna Nachiappan. Sorna is a Senior
Associate in the Andersons Employment and Industrial Law Department.
Please note, this Blog is posted in Adelaide, South
Australia. It relates to Australian Federal legislation.