Understanding the Benefits Accompanying Employment Termination in Australia
Although losing your job can be difficult and stressful; it doesn’t have to be the end of the world. Depending on the circumstances and the type of termination, there are in fact some benefits associated with losing a job. We’ll look at some of these advantages in this blog post and how they can assist you in adjusting to your circumstances and pursuing new opportunities.
What are the types of employment termination in Australia?
There are two main types of terminations of employment: voluntary and involuntary. When you decide to quit your job, retire, or end a fixed-term contract, this is referred to as a voluntary termination. When your employer decides to terminate your employment without your consent due to things like redundancy, subpar work, misconduct, or contract violations, this is known as an involuntary termination.
What are the benefits of voluntary termination?
You might be qualified for some benefits if you decide to leave your job voluntarily, including:
– Notice pay: This is the sum of money that you receive from your employer for the time that you give as notice before quitting your job. The legal minimum notice period is one week, but your contract or award may specify a different amount. Based on your normal pay rate and number of hours worked, notice pay is determined.
– Annual leave: This is the amount of paid time off you accrue for each year that you work for a company. During your notice period, you can use any unused annual leave, or you can get paid for it when you quit your job. The minimum amount of annual leave that you are entitled to is four weeks, but your contract or award may provide for more or less. Your regular pay rate and number of hours worked are used to calculate your annual leave.
– Long service leave: This is the amount of paid time off you accrue for working for the same employer, or a group of related employers, for a lengthy period of time. During your notice period, you can use your long service leave, or you can get paid any remaining balance when you quit your job. The minimum long service leave entitlement varies depending on your contract or award and the State/Territory law. Based on your regular pay rate and number of hours worked, long service leave is computed.
– Superannuation: This is the sum of money that your employer contributes to a retirement income fund. When you reach a certain age or in certain situations, such as when facing severe financial difficulty or a permanent disability, you may be able to access your superannuation. The minimum superannuation contribution rate is 11% of your regular income, though your contract or award may require a different amount.
Did you know?
Under current law Companies have to pay super on your annual leave (including if you take it as a lump sum), however, when you have your annual leave paid out as part of a termination the Super Guarantee is not applicable (as it is not deemed part of your OTE).
So, if you have a lot of annual built up, it might be worth seeing you if you can go on an extended holiday before termination so you can pick up some additional retirement savings.
(Individual EBAs may differ)
What are the benefits of involuntary termination?
You may be entitled to certain benefits if your employer decides to terminate your employment without your consent, including:
– Notice pay: This is similar to a voluntary termination, with the exception that your employer is required to give you the required amount of notice or pay you in lieu of it. The legal minimum notice period is one week, but it could be longer depending on your age and length of service. Based on your normal pay rate and number of hours worked, notice pay is determined.
– Redundancy pay: This is the sum of money your employer will give you if they fire you because they no longer require your position or expertise. After a year of continuous service, you are entitled to a minimum of four weeks in redundancy pay; however, depending on your service history and age, this amount may go up. Based on your regular pay rate and number of hours worked, redundancy pay is determined.
– Unfair dismissal remedy: If you are successful in proving that your employer terminated your employment in an unfair or illegal manner, you may be entitled to a certain amount of money or other compensation. If you have been employed for at least six months (or twelve months for small businesses) and make less than the high-income threshold, which is currently $167,500 per year, you may file an unfair dismissal claim. The Fair Work Commision must receive your claim within 21 days of the termination date; they will then attempt to settle the conflict through conciliation or arbitration.
– JobSeeker payment: If you are looking for work and meet the requirements, you may be eligible to receive money from the government in this amount. Within 14 days of losing your job, you can apply for JobSeeker payment online or over the phone at Services Australia. The amount of the JobSeeker payment is determined by your income and assets, family circumstances, and requirements for shared obligations.
How can these benefits help you cope with employment termination?
While losing your job can be upsetting, it can also be an opportunity to revisit your career objectives and consider new options. You can deal with the financial and emotional effects of losing your job by taking advantage of the benefits that come with termination of your employment, which include:
– Income support: While you look for a new job or retrain for a different career, the benefits can help you pay your bills and cover your living expenses.
– Time off: The advantages may allow you to take some time off to unwind, recharge, and consider your advantages and interests.
– Motivation: The advantages may inspire you to revise your resume, network with potential employers, and submit applications for positions that suit you.
– Confidence: The benefits can increase your confidence by acknowledging your worth and contribution to the economy and your previous employer.
Depending on the type and circumstances of the termination, there may be some benefits to terminating an employment relationship in Australia. These advantages can support you as you transition to new opportunities and deal with the financial and emotional effects of losing your job. However, you should also be aware of your obligations and rights as an employee. If you have any questions or concerns about your employment termination, you should also seek professional advice.