A redundancy1 happens when a workplace change leads to an employee’s function becoming no longer necessary. It’s the chief executive who must make the decision to terminate their employment as a result. A redundancy package may include an incentive payment.
1. In accordance with directive no.04/12
A retrenchment happens when an employee's position has been made redundant and it’s been determined that it’s no longer appropriate to continue seeking to secure a permanent placement for them. An incentive payment doesn’t form part of a retrenchment payment. When calculating superannuation entitlements, we treat retrenchment and redundancy the same way.