Redundancy pay and redundancy insurance are two quite different sides of the same issue. We often confuse one with the other because there really isn’t a lot out there to help us tell the difference. Redundancy isn’t a topic many of us would like to think about, but it’s a reality that unfortunately many of us do have to face. When something so drastically altering our life is possible through any number of unfortunate circumstances, it pays to make sure your contingency plan is in place. So, if you are wondering “what is redundancy pay?” or “what’s the difference between redundancy pay and redundancy insurance?” you’ll have all your questions answered here!
A question we are often asked by our customers is “Do I really need redundancy cover?” To this question, we ask the customer to consider what would happen if you were to be made redundant in your current position. Regardless of your salary, debts and assets or lifestyle, every person would be affected by a loss of a job. However, this might be in a different way than you think. While many people consider being made redundant meaning a month or two off work while you find another job, this is not the case most of the time. The job market is tough to break and while you may find your dream replacement job pretty quickly, there may be dozens of others who are after that same job. Therefore it is important to apply for redundancy cover today.
More than 1 in 10 of private sector employees under a collective employment agreement do not have any redundancy pay. This number of private sector employees on collective employment agreements (CEAs) walking away with nothing has doubled since 2009 when this was only 5%. According to Victoria University’s Centre for Labour Employment and Work, many people aren’t even covered by CEAs. For those employees under an individual employment agreement, entitlements to redundancy money are rarely present.