Do Small Businesses Have to Pay Redundancy in Australia?
Usually, small businesses with fewer than 15 employees do not have to pay statutory redundancy pay under the National Employment Standards. That’s the big rule people quote, and broadly, it’s true.
But there are catches. Even if redundancy pay is not required, the employee may still be entitled to notice, unused leave, outstanding wages, and possibly extra entitlements under an award, enterprise agreement, or contract.
What counts as a small business?
Under Fair Work rules, the key threshold is generally fewer than 15 employees. That headcount can include regular employees, and in some cases casuals employed on a regular and systematic basis.
What small businesses still have to pay
- notice of termination, or pay in lieu
- unused annual leave
- long service leave where applicable
- outstanding wages and other accrued entitlements
So “no redundancy pay” does not mean “no final payout”.
Important: Awards, enterprise agreements or contracts can provide more generous rights than the bare minimum NES rule.
Our Redundancy Pay Calculator covers notice and standard redundancy scenarios.
FAQs
Does a small business ever pay redundancy?
Sometimes, yes, if an award, agreement, or contract says so.
Do small businesses still owe notice?
Yes, usually notice or pay in lieu still applies.
What if the employee count is close to 15?
That’s where it gets worth checking carefully, because the headcount rules matter.