Redundancy can be a challenging and emotional experience—especially if it’s unexpected. For professionals in the mining and resources sector, the sudden shift from secure employment into uncertainty can be daunting.
However, with the right guidance, this transition can also offer a rare opportunity to take stock, protect your interests, and reposition for the future.
While it’s tempting to focus only on what comes next—such as lining up a new role or starting a consultancy—it’s equally important to consider the legal, financial and estate planning implications of your redundancy payout.
Understand What You’re Signing: The Settlement Agreement
If you’ve been offered a redundancy, you’ll almost certainly be asked to sign a Settlement Deed or Separation Agreement. This document formalises the terms of your departure, including your payout, benefits, and any post-employment restrictions.
Before signing anything, consider seeking legal advice. These agreements are binding, and once you’ve signed, your ability to negotiate is gone. Key issues to look for include:
- Non-compete and restraint clauses: These could limit your ability to take on similar work in your field, potentially impacting your next move—whether that’s joining a competitor, consulting or launching your own venture.
- Confidentiality and non-solicitation terms: These can affect your ability to engage with former colleagues or clients. Learn more about these clauses in our article on non-solicitation and intellectual property.
- Tax and entitlements: Make sure your payout complies with Australian laws for eligible termination payments (ETPs), including tax concessions and limits.
If the terms are unclear or seem overly restrictive, it’s worth negotiating—particularly in light of proposed changes to non-compete laws flagged in the upcoming Federal Budget.
Is It a Genuine Redundancy?
Sometimes, what’s presented as redundancy may not meet the legal definition. If you suspect the process is being used as a means to terminate employment unfairly—especially if you’re the only one affected, or the role appears to be quickly refilled—it’s crucial to assess your rights and to do so quickly.
Legal advice may uncover issues under:
- The Fair Work Act
- The applicable Award or enterprise agreement
- Your original employment contract
In some cases, pursuing an unfair dismissal claim may be appropriate, particularly if the redundancy was not genuine. You could be entitled to additional compensation or remedies. However, strict time limits apply, so it’s important to act quickly and seek legal advice.
Why Estate Planning Should Be Part of the Redundancy Conversation
A redundancy payout can often be a large sum—potentially hundreds of thousands of dollars. This influx of capital can be a turning point or a fork in the road, not just for your current finances, but for you and your family’s long-term wealth planning.
It’s the ideal time to revisit your estate planning, especially if your circumstances are about to change significantly.
Consider:
- Updating your Will to reflect your new financial position.
- Reviewing or creating an Enduring Power of Attorney to ensure someone you trust can make financial decisions if you’re unable to.
- Checking or nominating Binding Death Benefit Nominations on your superannuation to ensure funds go where you intend.
- Restructuring wealth: Redundancy might coincide with transitioning into consulting. If you plan to establish a business, it may be time to consider asset protection and wealth extraction strategies. See more in our guide on extracting wealth from your consultancy.
These are important steps that help secure your legacy and minimise risk to your family.
Financial Planning Beyond the Payout
Redundancy often means both a cash payout and the possibility of re-entering the workforce shortly thereafter. This means the payout could become surplus cashflow, especially if you start earning again quickly.
If a redundancy is on the cards now is the time to:
- Seek taxation advice on how to structure the funds tax-effectively
- Consider contributing to superannuation (subject to contribution caps and eligibility)
- Evaluate debt reduction, investments or short-term liquidity needs
- Create a financial strategy aligned with your next steps—whether that’s retirement, consulting, or a new corporate role
If you’re planning to move into consulting, our article on becoming a consultant after redundancy outlines key financial and strategic considerations.
Don’t Sign Away Opportunity—Seek Advice First
Redundancy can feel like a door closing—but with the right advice, it can be the start of something better. Legal, financial, and estate planning advice can protect you from hidden risks and ensure your payout works for you in the long run.
If redundancy is on the table, even if it’s just a discussion, speak to an expert before signing any agreements. The advice you receive now could make a lasting impact on your financial and personal future.
Need advice now?
For personalised legal and estate planning advice following redundancy, contact Robert Lamb at Hillhouse Legal Partners.
📞 Call +61 (0)7 3007 2000 or 📩 email contact@resourcesunearthed.com.au.
Resources Unearthed connects mining and resources professionals with trusted legal, financial, and accounting experts to ensure you’re supported at every step.
