If the business you work for has at some point changed hands, been transferred, or been sold, you may be wondering what redundancy entitlement you have. The Fair Work Act 2009 (Cth) provides that in some circumstances when there is a transfer of business your new employer has to recognise your service with your old employer in calculating your entitlements, which includes your redundancy entitlements.
If there was a ‘transfer of business’, then section 22(5) of the Fair Work Act 2009 (Cth) provides that your new employer will have to recognise your prior service with your old employer. This means you can count your employment with the old employer towards your continuous service when calculating your entitlements.
Transfer of business
For there to have been a ‘transfer of business’ the following elements need to be satisfied, under section 311 of the Fair Work Act 2009 (Cth):
The first two factors are straightforward factual matters, but the other two factors are a bit more difficult to understand. We have broken it down below:
Work performed is ‘substantially the same’
Work being ‘substantially the same’ essentially means that the duties in your role remain the same, or essentially the same. For example, where an employee has to undertake training for the new role at the new employer because of increased responsibilities and requirements, the roles are likely to not be substantially the same.
For work to be considered ‘substantially the same’ your duties need to remain the same, or essentially the same. For example, where an employee has to undertake training for the new role at the new employer because of increased responsibilities and requirements, the roles are likely to not be substantially the same.
The connection between the old employer and the new employer
There must also be a connection between the employers. This will exist if:
When looking at redundancy entitlements specifically, your old and new employers must either be ‘associated entities’ or a ‘transfer of business’ must have taken place. Otherwise, your length of service may not count for the purposes of calculating your redundancy payment:
If the two businesses are not associated entities, and the new employer refuses to recognise your service with the old employer under section 122(1) of the Fair Work Act 2009 (Cth), then your period of service with your old employee will not be counted towards any redundancy entitlement.
To calculate the exact amount of redundancy you are eligible for, you can refer to the table found in section 119(2) of the Fair Work Act 2009 (Cth), as well as any relevant Modern Award or Enterprise Agreement your employment may be subject to.
Essentially, if the business you work for has changed, your full length of service for both employers will be recognised in calculating your redundancy entitlements if your old and new employers are associated entities or if there has been a transfer of business between non-associated entities and your new employer has not refused to recognise the previous service.
However, there are always exceptions to the rule. If you are unsure about your position, you should seek legal advice.