Redundancy payments and unfair dismissal


When assessing compensation for unfair dismissal, any payment made to the employee by the employee as a redundancy payment will be deducted from the amount of compensation being determined by the Fair Work Commission on the basis that it would be double dipping.

“Further, even if the dismissal had been unfair, the Commission would need to take this redundancy payment into account in calculating compensation under s 392(2). It would plainly be a relevant matter under s 392(2)(g). Inherent in the concept of ‘compensation’ in s 392 is the notion of making good economic loss. If the dismissal was unfair and ought not to have occurred, then the payment associated with the dismissal should also not have occurred. The fact that the payment was in fact made is centrally relevant to the consideration of compensation. I agree with Telstra’s submission that if the dismissal had been adjudged to be unfair, no compensation could have been ordered, because the redundancy payment Mr Yang received exceeded the 6 month compensation limit in s 392(5) of the Act.”

Yang v Telstra Limited  [2023] FWC 3319 delivered 12 December 2023 per Colman DP