Quick Summary
Quick Summary
- NES redundancy pay applies to employers with 15 or more employees under the Fair Work Act 2009 s.119
- The statutory scale ranges from 4 weeks pay (1-2 years service) to 16 weeks (9-10 years), dropping to 12 weeks at 10+ years
- Small businesses with fewer than 15 employees are exempt from NES redundancy pay
- Redundancy pay is separate from and additional to the notice period under NES s.117
- Casual employees and those with less than 12 months service are not entitled to NES redundancy pay
When you make an employee’s position redundant, the National Employment Standards (NES) set the minimum redundancy pay and notice you must provide. Under Fair Work Act 2009 s.119, employers with 15 or more employees must pay redundancy based on a statutory scale tied to years of continuous service. Small businesses with fewer than 15 employees are exempt. The redundancy pay scale ranges from 4 weeks pay for 1-2 years of service up to 16 weeks for 9-10 years, with a reduction to 12 weeks at 10+ years.
NES redundancy pay is separate from and additional to the notice period under s.117. A redundant employee receives their notice (worked or paid in lieu), their redundancy pay, and their accrued leave. Getting the calculation wrong or failing to follow award consultation requirements is one of the fastest ways to trigger an unfair dismissal claim. The maximum unfair dismissal compensation is $95,050 (half the $190,100 high income threshold from 1 July 2026).
This guide covers the full NES redundancy framework: the pay scale, notice periods, small business exemption, calculation method, and consultation obligations.
NES Redundancy Pay: The Statutory Scale
The NES redundancy pay scale is set out in Fair Work Act 2009 s.119. It applies only to employers with 15 or more employees:
| Period of Continuous Service | Redundancy Pay (Weeks) |
|---|---|
| Less than 1 year | Nil |
| 1 year but less than 2 years | 4 weeks |
| 2 years but less than 3 years | 6 weeks |
| 3 years but less than 4 years | 7 weeks |
| 4 years but less than 5 years | 8 weeks |
| 5 years but less than 6 years | 10 weeks |
| 6 years but less than 7 years | 11 weeks |
| 7 years but less than 8 years | 13 weeks |
| 8 years but less than 9 years | 14 weeks |
| 9 years but less than 10 years | 16 weeks |
| 10 years or more | 12 weeks |
The reduction from 16 weeks to 12 weeks at 10 years reflects long service leave entitlements.
NES Redundancy Notice Period: What Employers Must Give
Redundancy notice is governed by NES s.117. The notice period depends on length of service: 1 week for under 1 year, 2 weeks for 1-3 years, 3 weeks for 3-5 years, and 4 weeks for 5+ years. Small business employers must give at least 1 week regardless of tenure. Employers can pay in lieu of notice. For more detail, see our notice period guide for employers.
For the official reference, see the National Employment Standards on the Fair Work Ombudsman website.
NES Redundancy Entitlements for Small Business Employers
If your business employs fewer than 15 employees, you are not required to pay NES redundancy pay. The count is by headcount at the time of redundancy, including full-time, part-time, and regular casual employees. The threshold is strict: 14 employees means exempt, 15 means the full NES scale applies. Check your modern award too, as some include redundancy provisions regardless of employer size. See the modern awards on the Fair Work Commission website.
⚠️ Small Business Exemption: Count Your Employees Correctly
The NES small business redundancy exemption applies only to employers with fewer than 15 employees. Count all full-time, part-time and regular casual employees by headcount. Getting this count wrong can result in unpaid redundancy entitlements and Fair Work Commission claims.
Key Takeaways
Key Takeaways for Employers
- ✓Count employees by headcount (including regular casuals) to determine if the small business exemption applies
- ✓The redundancy pay scale peaks at 16 weeks for 9-10 years of service, then reduces to 12 weeks at 10+ years due to long service leave
- ✓Notice periods range from 1-4 weeks depending on tenure, and are paid in addition to redundancy pay
- ✓Some modern awards require consultation before redundancy and may have industry-specific redundancy provisions
- ✓Always check the relevant modern award before finalising a redundancy, as award terms can exceed the NES minimum
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How to Calculate NES Redundancy Pay
The calculation: determine continuous service, match to the s.119 scale, identify the base rate of pay (excluding overtime, penalties, allowances and loadings), then multiply weeks by base rate.
Example: $1,500/week, 6 years service, 22 employees. Redundancy: 11 x $1,500 = $16,500. Notice: 4 weeks = $6,000. Total severance: $22,500 before leave.
For help with payment in lieu of notice, our employer guide covers the steps.
NES Redundancy and Notice: Two Separate Obligations
Employers often conflate redundancy pay and notice. They are distinct: notice (s.117) is the period the employee works or is paid for before employment ends, while redundancy pay (s.119) is a severance payment based on years of service. A redundant employee receives both. You cannot substitute one for the other. See our guide on how to calculate redundancy pay for the full breakdown.
NES Redundancy Requirements: Consultation and Fair Process
Most modern awards include consultation clauses requiring employers to notify the employee, provide relevant information, give them an opportunity to respond, and genuinely consider redeployment. Failing to follow these steps is a leading cause of unfair dismissal findings, even when the redundancy is commercially necessary. See our guide on redundancy consultation failures for case examples.
The NES also requires reasonable steps to redeploy the employee within the business or an associated entity before proceeding. The Fair Work Act 2009 is available at legislation.gov.au.
NES Redundancy Schedule: Key Exceptions
Several categories are not entitled to NES redundancy pay regardless of employer size: casual employees, employees with less than 12 months service, apprentices (though some awards differ), and employees on fixed-term contracts ending on their agreed date. Always cross-check the applicable modern award and enterprise agreement.
Miscounting employees near the 15-employee threshold, skipping consultation, failing to consider redeployment, or using the wrong pay rate can all trigger a Fair Work Commission claim. The maximum compensation is $95,050 (half the $190,100 high income threshold from 1 July 2026). Getting redundancy right the first time is always cheaper than defending a claim.
Frequently Asked Questions
The NES redundancy pay scale under Fair Work Act 2009 s.119 ranges from 4 weeks pay for 1-2 years of continuous service up to 16 weeks for 9-10 years of service, then reduces to 12 weeks for 10 or more years. The full scale is: nil (under 1 year), 4 weeks (1-2 years), 6 weeks (2-3 years), 7 weeks (3-4 years), 8 weeks (4-5 years), 10 weeks (5-6 years), 11 weeks (6-7 years), 13 weeks (7-8 years), 14 weeks (8-9 years), 16 weeks (9-10 years), and 12 weeks (10+ years). The reduction at 10 years accounts for long service leave entitlements.
No. The NES redundancy pay provisions do not apply to small business employers, defined as those with fewer than 15 employees. The headcount includes full-time and part-time employees plus casuals employed on a regular and systematic basis. However, even if the NES exemption applies, some modern awards and enterprise agreements may still require redundancy pay for small business employees. Always check the applicable award before proceeding.
Under NES s.117, the notice period for redundancy is the same as for any other termination: 1 week for under 1 year of service, 2 weeks for 1-3 years, 3 weeks for 3-5 years, and 4 weeks for 5 or more years. Small business employers must give at least 1 week notice regardless of tenure. The notice period is separate from and additional to redundancy pay. Employers can pay in lieu of notice, meaning the employee receives the equivalent pay without working the notice period.
To calculate NES redundancy pay, first determine the employee’s continuous service period, then match it to the s.119 scale to find the number of weeks. Multiply the weeks by the employee’s base rate of pay for ordinary hours. Base rate of pay does not include overtime, penalties, allowances, or loadings. For example, an employee earning $1,500 per week with 6 years of service would receive 11 weeks redundancy pay, totalling $16,500, plus their notice period entitlement.
Under the NES, employers making a position redundant must: provide the correct notice period (or payment in lieu), pay redundancy pay based on the s.119 scale if the employer has 15 or more employees, pay out accrued annual leave and long service leave, and follow any consultation requirements in the applicable modern award or enterprise agreement. Failing to follow award consultation clauses is a common reason employers lose unfair dismissal claims, even when the redundancy itself is genuine.
No. Casual employees are not entitled to NES redundancy pay under the Fair Work Act 2009. The NES redundancy provisions apply to permanent full-time and part-time employees only. However, if a casual employee has been employed on a regular and systematic basis with a reasonable expectation of continuing work, they may be considered a permanent employee for redundancy purposes. Employers should also check the applicable modern award, as some awards extend redundancy entitlements to long-term casuals.
An employer cannot pay less than the NES redundancy entitlement. The NES is a statutory minimum and cannot be reduced by contract or agreement. However, the Fair Work Commission can reduce redundancy pay on application if it finds that the employer is a small business (fewer than 15 employees) or that the employee has been offered equivalent or greater employment with an associated entity. Employers can also seek a reduction if the employer cannot pay the full amount, but this requires a formal application to the Commission.
No. Redundancy pay and notice period are two separate entitlements under the Fair Work Act 2009. Notice (s.117) is the period an employee works before their employment ends, or payment in lieu of that notice. Redundancy pay (s.119) is a severance payment based on years of service that compensates the employee for losing their job due to the position becoming redundant. An employee made redundant receives both: their notice period (worked or paid out) plus their redundancy pay, plus accrued leave.
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