The information on this page applies only to employers and employees in the WA state industrial relations system. The state system covers businesses which operate as sole traders, unincorporated partnerships, unincorporated trust arrangements as well as any incorporated associations or not for profit bodies that are not trading or financial corporations. The Guide to who is in the WA State System has more detail.
This information does not apply to any business which operates as a Pty Ltd business and is a trading or financial corporation not to any incorporated association or not for profit body that is a trading or financial corporation. These businesses and organisations are in the national fair work system and should visit the Fair Work Ombudsman website for information on employment laws.
The entitlement to redundancy payments can depend upon the WA award that applies. Please check the WA award summaries or contact Wageline for information on redundancy provisions under the relevant WA award.
When an employee has been made redundant they are entitled to receive:
- unpaid wages, and unused accrued annual and long service leave
- the appropriate notice period or pay in lieu of notice (if the employee is not required to work the notice period) and
- severance pay (if applicable)
Severance pay does not generally apply to businesses with less than 15 employees (including casual and part time employees).
However, the WA awards listed below do not exclude businesses with less than 15 employees from making severance payments, so if one of these awards covers the employment the award’s redundancy provisions will need to be checked:
- Bakers' (Metropolitan) Award
- Building Trades (Construction) Award
- Children's Services (Private) Award
- Dental Technicians' and Attendant/Receptionists' Award
- Earth Moving and Construction Award
- Electrical Contracting Industry Award
- Food Industry (Food Manufacturing or Processing) Award
- Pastrycooks' Award
- Plaster, Plasterglass and Cement Workers' Award
Employees not entitled to severance pay
Where severance pay is applicable, an employer does not generally have to provide severance pay to:
- employees with less than one year’s service
- probationary employees
- apprentices and trainees
- casual and contract employees
- employees terminated due to serious misconduct or for other reasons not related to redundancy.
However, some WA awards may entitle these employees to severance payments, so the relevant award’s redundancy provisions must be checked.
Severance pay entitlements
The amount of severance pay depends on how long the employee has worked for the business, as shown in the following table.
The table shows the minimum severance payments and these override any lesser amount specified in a WA award. If the WA award specifies a higher severance payment, the greater entitlement must be paid.
Severance pay does not generally apply to businesses with less than 15 employees (including casual and part time employees). However, some WA awards do not exclude businesses with less than 15 employees from making severance payments, so if the employment is covered by one of these you will need to check the award’s redundancy provisions.
|Period of continuous service||Minimum number of weeks pay|
|Less than 1 year||Nil|
|1 year and less than 2 years||4 weeks|
|2 years and less than 3 years||6 weeks|
|3 years and less than 4 years||7 weeks|
|4 years and less than 5 years||8 weeks|
|5 years and less than 6 years||10 weeks|
|6 years and less than 7 years||11 weeks|
|7 years and less than 8 years||13 weeks|
|8 years and less than 9 years||14 weeks|
|9 years and less than 10 years||16 weeks|
|10 years and over||12 weeks|
The calculation of redundancy pay is based on the applicable number of weeks multiplied by ordinary time earnings. It excludes overtime, penalty rates, disability allowances, shift allowances, special rates, fares and travelling time allowances, bonuses, and any other ancillary payments of a like nature.
If the employee resigns during the notice period, he or she is entitled to the same severance pay they would receive if they had worked until the end of the notice period. However, in this circumstance the employee is not entitled to payment in lieu of notice.
Incapacity to pay
Employers can apply to the Western Australian Industrial Relations Commission to have the severance payment varied if they:
- do not have the capacity to pay; or
- find acceptable alternative employment for the employee.
All state system employers are legally required to keep employment records that detail time worked, leave taken and pay received by employees.
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