Managing people

Redundancy – does service as apprentice count?

Does service as an apprentice count when calculating redundancy entitlements if the employee was made redundant when a fully qualified tradesperson? Learn more about redundancy entitlements here.

Imagine an employee has completed their four-year apprenticeship with a company about two years ago, meaning a total period of service of six years. However, due to a downturn in business, the employee’s position has become redundant.

Under the National Employment Standards (NES), a person employed as an apprentice is not entitled to payment of redundancy pay.

The company believes that the period of employment as an apprentice will not count towards total service for the purpose of calculating his redundancy pay because this is not recognised under the Fair Work Act 2009.

The employee’s modern award does not provide any clarity on this issue. The employee has said he will take advice on this matter because it seems unfair.

Under this circumstance, what is the employee’s entitlement to redundancy pay when part of his employment with the company was served under an apprenticeship?

Apprentices and redundancy pay

The Fair Work Act (s123(4)) does exclude an apprentice from an entitlement to redundancy pay; however, this provision only applies at the time the redundancy occurs.

The relevant provision states redundancy pay provisions do not apply to an employee who is an apprentice (not was an apprentice).

This employee is now employed as a tradesperson and is entitled to redundancy pay under the NES.

Continuous service

The redundancy pay is based on continuous service with the employer.

In defining the meaning of ‘continuous service’, s22 of the Act does not exclude service with the employer as an apprentice.

This means the employee, in this case, is entitled to redundancy pay under the NES based on at least six years but less than seven years of continuous service with the employer (i.e. 11 weeks of redundancy pay).

Award or agreement

It should be noted there may also be a provision in the applicable modern award or enterprise agreement that refers to service as an apprentice and the effect on redundancy pay.

An example of such a provision is contained in cl 14.2(c) of the Building and Construction General On-Site Award 2020.

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