Question: How should we calculate redundancy pay if a part-time employee once worked full-time hours? Is it based on the part-time hours or an average over a specified period of time?

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Answer: The entitlement to the number of weeks of redundancy pay is determined by an employee’s continuous service with an employer. Changing from full-time to part-time employment (or vice versa) does not affect the employee’s period of continuous service.

In determining a ‘week’s pay’ for the purposes of redundancy pay, the National Employment Standards states that the amount of redundancy pay is calculated on the employee’s base rate of pay for their ordinary hours of work.

The Fair Work Act 2009 defines ‘base rate of pay’ to mean the rate for the employee’s ordinary hours of work, but not including incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates, and any other separately identifiable amounts.

The ‘ordinary hours of work’ are the employee’s part-time weekly hours at the time of redundancy. This means the weekly rate of pay represents the employee’s current ordinary weekly part-time base rate of pay.

Likewise, if the employee had transferred from part-time to full-time employment, redundancy pay would be paid at the employee’s ordinary full-time weekly base rate of pay.