Retrenchment or redundancy


Retrenchment, or redundancy, is when a worker loses their job because it's no longer needed. It's important that the employer does not make you redundant, they make the position redundant. Usually this means that they should not be replacing the your position with someone else.

Retrenchment or redundancy might happen because:

  • technology changes
  • the workplace is restructured
  • the employer can no longer afford to pay the worker
  • the business is sold and the workers are not kept on by the new owners.

Employers should consult for a reasonable period before making jobs redundant and give workers a chance to look for other jobs.

Many workers are legally entitled to a notice period and severance pay if they are retrenched. Most awards and workplace agreements specify the requirements. Businesses which has fewer than 15 staff may not be required to pay workers severance pay. For more information, contact the Fair Work Ombudsman on 13 13 94 or visit

The South Australian Fair Work Act 1994 provides a minimum standard for severance pay that applies to all employees in the state industrial relations system. For more information contact SafeWork SA on 1300 365 255 or visit

You are also entitled to receive payments owing to you, such as annual leave and outstanding wages.

A worker whose job is genuinely redundant cannot make a claim for unfair dismissal under federal law.