Restructures and redundancies can be extremely challenging for managers and employees alike. Positions filled by apprentices are often the first to be assessed for redundancy when undergoing a restructure as they are, by their nature, the least skilled and qualified employees within any given workforce. Such processes are, unfortunately, a necessary part of doing business. By knowing the correct redundancy payouts to make, restructures and redundancies can be managed with as little angst as possible.

Do Apprentices Get A Redundancy Pay Out?

Firstly, under the Fair Work Act 2009 (Cth) (“FW Act) (see s 119) a ‘small business employer’ is not required to make redundancy payouts to a redundant worker, irrespective of whether the employee is an apprentice.

For other ‘non-small’ business employers, redundancy payouts are compensation usually payable to the employee for the loss of their job. Apprentices are, however, not entitled to such compensation because s 123(4)(a) of the FW Act states that the redundancy provisions set out in ss 119 to 122 of the FW Act do not apply to apprentices.

It is worth noting that s 123 of the FW Act does allow for the possibility of an apprentice being covered by an industry-specific redundancy scheme set out in a modern award (such as the one found in Building and Construction General On-Site Award 2010) or a redundancy scheme set out in an enterprise agreement.

Despite this possibility, modern awards that do have industry-specific redundancy schemes, also have clauses within them which specifically exclude apprentices (see for example clause 15.2(e) of the Building and Construction General On-Site Award 2010).

In light of this, it would appear that the only time an apprentice will be entitled to redundancy pay is where they are covered by a generous enterprise agreement that seeks to incorporate an industry-specific redundancy scheme that is more beneficial than that set out in the relevant modern award.

Need Specialist Help?

Restructures leading to multiple staff redundancies are a complex and difficult workplace relations exercise. There are many traps for employers who do not follow a procedurally fair process or consult sufficiently.

In preparing your restructure strategy, you need to remember employees may still claim an entitlement to redundancy payments or be able to bring a discrimination claim against you even if they remain employed in a post-restructure position, which makes this area especially problematic to say the least! There are no set rules in developing a redundancy strategy that minimises the associated legal risks but we can help make your redundancy process as smooth as far as possible, minimising legal risks as we go.

For specialist assistance during these challenging times, contact one of our experienced consultants on 0408 443 536 or matt@workplacewizards.com.au.